1. Part One: Strategic Planning Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-1

2. Sales Management: Shaping Future Sales Leaders Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. Introduction to Sales Management Chapter 1

3. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-3 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. Learning Objectives  Define strategy hierarchy and understand how sales and marketing strategies affect overall strategy  Identify different types of selling strategies and how the selling process varies  Describe the sales management process and responsibilities and activities of sales managers

4. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-4 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. The Future for sales and sales force management is pretty bright.  Many consumer believe the sales profession not a noble endeavor.  Business customers have a better appreciation for selling profession, because these buyers rely on salespeople to bring them solutions to the business problems that challenge them.  Product knowledge, technical expertise, and business acumen are all required to satisfy customers' needs.  Sales positions are hardest to fill.  Sales consumes >20% of a firm’s revenue.  as a career opportunity, starting in sales is an excellent choice.  Many CEOs got their start in sales.  Sales mangers tends to earn more than their counterparts in other areas, moreover, sales jobs will grow at much faster rate than other professions.

5. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-5 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. From Sales Rep to Sales Manager  “Manager of people”  Sales success is poor predictor of success as sales manager  Most successful sales reps are eventually pressured to make the transition to sales mgmt “This is a decision that must be carefully analyzed because it’s not an easy transition to go from being a player to a coach.”

6. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-6 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. What Being a Sales Manager Means Coaching  Coaching salespeople so they can improve Developing  Developing strategies and delegating the responsibility for implementation to others Motivating  Figuring out how to motivate people, some who are older than you Convincing  Convincing others in the organization that what is right for the sales force is right for their departments, too

7. What is Sales Management ? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-7 Sales Management: is the activities required to lead, direct, or supervise the personal selling efforts of an organization. This textbook primary objective is to explain this function of managing salespeople. And due to the importance of having a good strategy, this textbook also discusses many of the day-to-day tasks that sales managers do to further a firm’s strategy goals. Isn’t it important to study the selling process and selling skills? Yes it is extremely important, because selling is the essence of Sales Management science. Moreover, in marketing orientated companies sales are seen to be part of the marketing concept. So we will include two chapters from another textbook during our discussion.

8. Important terms Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-8 What is the strategy ? it is a plan designed to accomplish a mission. What is the mission ? It is a set of objectives. - If your objective is to arrive at time to your 8 O’clock class, then what will be your strategy to achieve this mission ( objective) ?

9. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-9 Establishing the Parameters of the Firm’s Strategy: The Mission Statement  Inspire the members of an organization  Give purpose to their actions  Guide their decision-making  Serve as a standard against which decisions can be weighed  Once the mission’s objectives are set, strategy can be created

10. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-10 Sample Mission Statements  Everything we do is inspired by our enduring mission:  To Refresh the World... in body, mind, and spirit  To Inspire Moments of Optimism... through our brands and our actions  To Create Value and Make a Difference... everywhere we engage  The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit  Coca-Cola  Southwest Airlines

11. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-11 The Strategy Hierarchy  Corporate Strategy encompasses plans and goals for the entire organization  Address questions in a general sense, such as what markets and sourcing options company should engage  Ex: hire sales force vs. use distributors  Ex: outsource mfg and focus internally on marketing  Business units create their plans to support corporate strategy.  The flow of the strategy from the organizational level to the units is called the Strategy Hierarchy.

12. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-12 Corporate Strategy Marketing Strategy Sales Strategy The Strategy Hierarchy

13. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-13 At the marketing level, planners have to answer the following questions. Markets  What markets do we serve with what products? Relationships  What types of relationships do we form and with whom? Investment  What level of investment will be required, and how will we locate and allocate the needed resources? Objectives  What are the detailed objectives and action plans?

14. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-14 What Markets Do We Serve with What Products?  Find a sustainable competitive advantage  Need expertise, technology or a patent.  Sustainable competitive advantage is something that gives a company an edge in the market overtime.  Competitive advantage : the results of a company matching a core competency to opportunities it has discovered in the market.  Core competency: things a firm does extremely well, which sometime give it an advantage over its competition.

15. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-15 Product-Market Grid: achieving growth via products and markets. Examples : new countries, new industries.

16. Product-Market Grid: achieving growth via products and markets. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-16 Note: the risk associated with diversification are far greater than with other market expansion approaches, why? Simply, because it requires developing both new products and new market.

17. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-17 What Types of Relationships Do We Form and with Whom?  Strategic plan considers network of relationships  Investors, potential investors, bankers  Suppliers  Personnel sources  Regulatory agencies  Relationship with customers is most important.  Customers’ lifetime value is worth more than the average single purchase. (try to extend the relationship as much as you can.)  A service advantage is often a function of the quality of relationships

18. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-18 Customer Relationship Management (CRM): Key Terms  CRM: identifying and grouping customers to best acquire, retain, and grow customers  Sales and marketing teams are responsible for CRM  Customer acquisition strategy: plan to obtain new customers. - can include marketing activities such as telephone prospecting and attending trade shows to identify potential customers.  Customer retention strategy: plan designed to keep customers. - might include making quarterly visits to current customers or inviting them to technology shows to see the firm’s newest products.  Growth strategy: plan designed to increase sales to the same customers. - these might include offering special discounts to customers when they make larger purchases.

19. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-19 Global Sales Management: Going Global to Achieve Growth  QuadRep’s expanding customers wanted local support in Singapore  QuadRep opened office in Singapore  Has since followed customers across the globe, opening offices in Malaysia, China, Taiwan, Thailand, the Philippines, and Mexico Source: Charles Cohon, Vice President of Research of Manufacturers’ Representatives Educational Research Foundation. He can be reached through his Web site, www.cohon.com.

20. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-20 Global Sales Management: Going Global to Achieve Growth  Empire Technical Group’s customers moved mfg and purchasing to Asia  ETG and several other companies formed a consortium and included Asian partners where Asia/Pacific resources were required  Became opportunity to pursue contracts to build entire assemblies as well as just parts  Morphed into international design and assembly house, controlling manufacturing of complete assemblies, turning “a $3 (part) sale to a $103 sale” Source: Charles Cohon, Vice President of Research of Manufacturers’ Representatives Educational Research Foundation. He can be reached through his Web site, www.cohon.com.

21. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-21 What Level of Investment Will Be Required, and How Will We Allocate the Needed Resources?  Money, human or social capital  Human capital : refers to the people that make up an organization.  Human capital decisions include:  Determining number of salespeople  What skills and experience they must have  What training they require  Other decisions include:  Whether to hire telephone prospectors or to outsource  Who handles customer service (a sales rep or a customer service rep).

22. What Level of Investment Will Be Required, and How Will We Allocate the Needed Resources?  Social capital: refers to the ties that a firm has with others, which can also be drawn upon as a resource.  In other word, social capital is who owes you favor or who can be asked a favor.  Look at the example on page 10. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-22

23. What Are the Detailed Objectives and Action Plans?  Remember that mission statements do not answer questions about what to produce or markets we should serve.  Nor they answer questions about the firm’s objectives and plans.  These objectives and plans become more specific at the marketing and sales strategies levels ( business unit strategies.) Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-23

24. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-24 What Are the Detailed Objectives and Action Plans?  SMART format for establishing objectives S pecific M easurable A chievable, yet challenging R ealistic T ime-based -Milestones are important short-term objectives, can help mark a companies progress toward achieving its objectives. -They also can be used to also determine when the plan is off course so that adjustments can be made.

25. What Are the Detailed Objectives and Action Plans?  Moreover, a good strategic plan has a detailed action plans, or steps, that will be taken in order to accomplish those objectives. - who will undertake each activity? - when the activity will occur?  At this point the firms strategy begins to involve salespeople and sales process. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-25

26. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-26 Self-Assessment Library  Go to http://www.prenhall.com/sal/  Access code came with your book  Click the following  Assessments I. What About Me C. Motivation Insights 5. What Are My Course Performance Goals?

27. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-27 Selling Approaches: grouping buyers by how they make decisions. Problem Solving or Consultative  Identify and solve a client’s problems  Also called needs-satisfaction selling or problem/solution selling.  Involves asking questions in order to determine customers needs and then presnting solutions. Affiliative  Based on the friendship between the salesperson and the individual buyer. Example : if all products buyer considering are the same, but post-sales service is critical, then the buyer will be more inclined to purchase from a friend who can be counted upon. Transactional  Finish sale as quickly and as easily as possible  Key to success is making as many calls as possible to as many people as possible.  Little thought is given to the lifetime value of customers. Enterprise  Business-to-business (B2B) concept  Based on not only person-to-person relationships but on company-to-company relationships

28. Enterprise Selling: Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-28 is a business-to-Business concept that reflect, at its best, a strategic partnership between the buying and selling organization. It is called enterprise selling because it is based on not only person-to- person relationship but on company-to-company relationships. For every customer there is salesperson; called account manager; that is responsible on managing the relationship with a business customer. When engaged in enterprise selling, a salesperson will, at times, utilize affiliative selling, transactional selling, and consultative selling all within an enterprise-level strategy.

29. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-29 The Selling Approach: 8 Steps

30. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-30 Prospecting  Prospecting involves identifying potential customers for a particular product or service  A prospect is a MAD buyer  the Money to spend  the Authority to buy  the Desire to buy it

31. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-31 Pre-Approach  During Pre-Approach, the salesperson tries to learn everything he can about the account  Can take a significant amount of time

32. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-32 Approach  Approach: salesperson asks buyer to commit to a meeting  Opening statement must get buyer’s attention

33. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-33 Needs Identification  Needs identification: salesperson confirms prospect is MAD (Money, Authority, Desire)  Comprised of 3 elements Questioning 1 Identification 2 Pre-commitment 3

34. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-34 Presentation  Presentation: salesperson describes product and how it meets buyer’s needs FeatureEvidence BenefitAgreement

35. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-35 Handling Objections  Objections: reasons a buyer offers to not buy your product  Can occur at any time  Salesperson should find out root of concern and resolve it

36. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-36 Closing the Sale  Close: when salesperson asks buyer for the sale  Good close  Reinforce decision to buy  Confirm implementation schedule  Thank the buyer  Ask for referral

37. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-37 Implementation/Follow-Up  Follow-Up: After delivery, ensure that the customer has good experience with product  Training, service, policies and procedures

38. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-38 Selling Process vs. Selling Approach Selling ProcessSelling Approach Prospecting PresentingClosing Transactional Consultative Affiliative Enterprise

39. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-39 Sales Leaders

40. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-40 Sales Executive Plan  Devise sales plan to meet strategic objectives  Develop general strategies that specify sales approach Organize  Determine type of sales force  Create hiring and training policies and strategies Implement  Communicate and roll out the plan  Create the right culture  Choose a compensation model Monitor  Sales and customer satisfaction  Salesperson recruitment, selection, training  Take corrective action as necessary

41. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-41 Field Sales Manager  Plans, organizes, implements, and monitors for specific sales team  Salespeople report to Field Sales Manager  Primary responsibility is sales quota  Responsible for training and motivating salespeople

42. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-42 Sales Executive vs. Sales Manager Duties ActivitySales ExecutiveSales Manager Plan Set overall sales targets for each product Set quotas for each salesperson for each product Organize Decide what type of people to hire for sales positions Interview and hire specific people for sales positions Implement Determine the compensation plan Identify each person’s motivators and find ways to reward good performance for each person Monitor Track sales by region; take corrective action such as additional training if sales are too low Observe each salesperson’s actions in the field and offer suggestions for their improvement

43. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-43 Ethics in Sales Management: Maintaining NCR’s Ethical Sales Culture We … recognize that selling only works when everything is right for the customer—when we deliver value —Rick Makos President, NCR-Canada

44. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-44 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. Role Play: T&G Supply  Opportunity 1: T&G Supply  Provides maintenance, repair, and operations items to manufacturers  Janitorial products, hardware products to fix machines, and other common maintenance products  Opportunity 2: Columbia Leasing  Car rental and leasing company  Your job is to sell corporate contracts

45. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-45 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. Role Play (continued) : Action Steps  Break into pairs  Each person picks 1 company to play sales mgr  Think about issues that reflect a service- dominant logic in each situation  Using other concepts discussed in the chapter, identify three characteristics that you would want each new salesperson to have  Take turns interviewing your partner for a sales position

46. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-46 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. Caselet 1.1: Killebrew Manufacturing  Makes plastic patio products  Widow Francine took over company  Annual growth rate ~5% for past 20 years  Trying to grow company  10% introductory discount  Makes prices same as biggest competitor  Killebrew quality is much better  Problem: Few new accounts are reordering  Are salespeople too quick to sell price, not quality?

47. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-47 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. Caselet 1.1 (continued) : What Would You Do?  Quality must be demonstrated and sold  What sales process or approach should Francine consider?

48. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-48 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. Caselet 1.2: Morton’s Ice House  Grill and microbrewery  Owner Sherry Morton hired Trey Denton to sell franchises  Trey sold 12 franchises in 1 year  Corporate goal is to sell 200 franchises in next 2 yrs  Hired 5 salespeople for Trey to manage

49. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1-49 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. Caselet 1.2 (continued) : What Would You Do?  Problems  Salespeople calling on same prospects  Other prospects not being called on  Sold only 22 franchises in 6 months  2 salespeople quit  10 franchises want out of contracts  What should Sherry do?

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