Ethical dilemma (p. 51)

1. Ethical dilemma (p. 51) • The personal computer business unit of Modern Tech is reaching the end of its fiscal year and is very close to meeting its sales growth objective. Herb Smith, your sales manager, is rallying the troops to “get over the top” so everyone can earn a substantial performance bonus. You are motivated to do your share. Your first call today is to ABC. ABC purchased a number of computers from you last year. Mary, purchasing manager at ABC, indicates that her IT people want to upgrade these computers. You know this sale could be critical to meeting your quota and the business unit’s sales growth objective. However, you also know that a new, more powerful PC will be available in 3 months. This new personal computer is exactly what ABC needs, but the sale cannot be made until after the fiscal year ends.

2. Organizational Strategiesand The Sales Function Module Three

3. Action The Importance of TrustAn Expert’s Viewpoint: Franciscan Estates consists of seven winery estates based in California. Using the traditional sales strategy of working through distributors, the company had little information about product or customer sales beyond the distributor level. The company developed a customer relationship management (CRM) strategy to establish different types of relationships with different customers at different levels.

4. channels Franciscan Estates makes wine 300 distributors worldwide restaurants consumers

5. Result The Importance of TrustAn Expert’s Viewpoint: The sales organization uses this information to strengthen relationships with existing accounts and to prioritize sales efforts to existing and new customers . . . . . . Franciscan Estates has used it CRM strategy and technology to develop a competitive advantage for its marketing and selling efforts.

6. Strategy Level Key Decision Areas KeyDecision Makers Corporate Mission SBU Definition Corporate Strategy Corporate Management SBU Objectives Sales Strategy SBU Management Strategy Types Strategy Execution Organizational Strategy Levels

7. Mission statements “We aim to be a global organization that constantly stays a step ahead in dealing with change, creates new value, and contributes broadly to society.” Sumitomo To provide clients with Expertise, Leading Edge Technology and Quality Products that will produce Maximum Drilling Program Efficiency and Environmental Care.Genesis Internat. Oilfield Services Our product: SERVICE. Our value-added: FINANCIAL ADVICE. Our competitive advantage: OUR PEOPLE.Vision and values of WellsFargo

8. Strategy Level Key Decision Areas KeyDecision Makers Target Market Selection Marketing Strategy Corporate Management Integrated Mkt Comm. Marketing Mix Dev. Account Targeting Strategy Business Strategy SBU Management Sales Channel Strategy Relationship Strategy Organizational Strategy Levels

9. An SBU is a single product or brand, a line of products, or a mix of related products that meets a common market need or a group of related needs, and the unit's management is responsible for all (or most) of the basic business functions." Cravens (1991) Definition ofStrategic Business Units (SBUs)

10. Change at the top In the early 1980s, the information technology (IT) world revolved around the product offerings of the Big 4: • IBM • Digital Equipment Corporation (DEC) • Burroughs • Data General In office automation including word-processing, Wang Computers and Lanier dominated. Only IBM remains as a major firm in these markets.

11. Market Share Objectives Sales Organization Objectives Primary Sales Tasks Compensation System SBU Objectives andthe Sales Organization Build Build sales vol. Secure distribution Prospective and new accounts Provide high service levels particularly pre-sales service Product/market feedback Salary plus incentive

12. Salary, bonus, incentive • A bonus is a lump-sum payment for an above-normal performance • A bonusmust always be combined with salary and/or commission • incentive means commission • Siebel Systems in 2001 paid a base salary plus commissions plus a quarterly bonus based on customer satisfaction surveys for each rep

13. Market Share Objectives Sales Organization Objectives Primary Sales Tasks Compensation System SBU Objectives andthe Sales Organization Hold Maintain sales vol. Consolidate market position through concentration on targeted segments Secure additional outlets Call on targeted current accounts Incr. service levels to current accounts Call on new accounts Salary plus commission or bonus

14. Market Share Objectives Sales Organization Objectives Primary Sales Tasks Compensation System SBU Objectives andthe Sales Organization Harvest Reduce selling costs Target profitable accounts Service most profitable accounts eliminate unprofitable accounts Reduce service levels Reduce inventories levels Salary plus bonus

15. Market Share Objectives Sales Organization Objectives Primary Sales Tasks Compensation System SBU Objectives andthe Sales Organization Divest or Liquidate Minimize selling costs and clear out inventory Dump inventory Eliminate service Salary

16. Business Strategy andthe Sales Function • Low-cost supplier Strategy Type Sales Force Role Pursue large customers Minimize cost Compete on price Seek customers who are low price shoppers

17. Business Strategy andthe Sales Function • Low-cost supplier • Differentiation Strategy Type Sales Force Role Compete on non-price benefits Provide high quality customer service Seek customers who are not low price shoppers

18. Business Strategy andthe Sales Function • Low-cost supplier • Differentiation • Niche Strategy Type Sales Force Role Serve a distinct target market not served well by others Provide high quality customer service Seek customers who are not low price shoppers

19. Advantages Only promotional tool that consists of personal communication between seller and buyer More credible and has more impact Better timing of message delivery Ability to tailor message to buyer Allows for sale to be closed Disadvantage High cost per contact Marketing Strategy andthe Sales Function

20. Personal Selling-Driven vs. Advertising-DrivenMarketing Communications Strategies Personal Selling When Message Flexibility is Important When Message Timing is Important When Reaction Speed is Important When Message Credibility is Important When Trying to Close the Sale When Low Cost per Contact is Important When Repetitive Contact is Important When Control of Message is Important When Audience is Large Advertising

21. Target Market: A definition of the specific market segment to be served Personal Selling-Driven Promotional Strategies are appropriate when: The market consists of only a few buyers that tend to be concentrated in location The buyer needs a great deal of information The purchase is important The product is complex Service after the sale is important Target Market Situations andPersonal Selling

22. The strategic integration of multiple marketing communications tools communicating a consistent message in the most effective and efficient manner. Integrated Marketing CommunicationsIMC

23. Major Category Types Business or Industrial Organizations Organizational Buyer Behavior:Types of Organizations Users: purchase products and services to produce other products and services Original Equipment Manufacturers (OEM):purchase products to incorporate into products Resellers: purchase products to sell

24. Major Category Types Organizational Buyer Behavior:Types of Organizations Federal, State, and Local Government Agencies Government Organizations Public and Private Institutions Institutions

25. Organizational Buyer Behavior: Buying Situations Straight Rebuy Buying Situation • Routinized Response Behavior Modified Rebuy Buying Situation • Limited Problem Solving New Task Buying Situation • Extensive Problem Solving

26. Organizational Buyer Behavior: Buying Center • Initiators • Users • Gatekeepers • Influencers • Deciders • Purchasers

27. Organizational Buyer Behavior:Buying Process Phase 1: Recognize Problem/Need Phase 2: Determine Item Specs/Quantity Needed Phase 3: Specify Item Specs/Quantity Needed Phase 4: Identify and Qualify Potential Sources Phase 5: Acquire and Analyze Proposals Phase 6: Evaluate Proposals/Select Suppliers Phase 7: Selection of Order Routine Phase 8: Performance Feedback/Evaluation

28. Personal Goals Organizational Goals Want a Feeling of Power Control Cost in Product Use Situation Seek Personal Pleasure Few Breakdowns of Product Dependable Delivery for Repeat Purchases Desire Job Security Adequate Supply of Products Want to be Well Liked Want Respect Cost within Budget Limits Personal and Organizational Needs

29. The classification of accounts withina target market into categories forthe purpose of developing strategic approaches for selling to each account or account group. Sales Strategy:Account-Targeting Strategy

30. A determination of the type of relationship to be developed with different account groups. Sales Strategy:Relationship Strategy

31. Ensuring that accounts receive selling effort coverage in an effective and efficient manner. Sales Strategy: Selling Strategy

32. The planned selling approach for each relationship strategy. Use one or more these The Internet Industrial Distributors Independent Representatives Team Selling Telemarketing Trade Shows Sales Strategy:Sales Channel Strategyensuring that accounts receive selling effort coverage efficiently and effectively

33. Increase Reach Gather Information about Customers Showcase New Products Conduct Surveys Enhance Corporate Image Obtain Feedback Service Existing Customers Sales Strategy: The Internet

34. Sales Channel Strategy:Industrial Distributors • Have Their Own Sales Force • May Represent One Manufacturer; Several Non-competing Manufacturers; Several Competing Manufacturers • Normally Carry Inventory

35. Sell complementary products from non-competing manufacturers. Do Not Normally Carry Inventory Paid for Performance (commission) Reduced Control over Selling Effort Reduced Access to Customer Information Sales Strategy:Independent or Manufacturers’ Reps

36. Independent sales firm • You want to expand and increase your customer base, but you need sales people to do it. And you can't hire sales people until you are making revenues from a larger customer base. • The most common solution is to hire an independent sales company, or rep firm

37. Rep firm The rep firm will work on commission‑only, but the reps will not work just for you ‑‑ they will represent several different companies and sell whoever's product or service seems the best match for the customer

38. Fixed costs…..Variable costs

39. Three Selling Situations New Task Selling Modified Resell Selling Situation Routine Resell Selling Situation Two Types of Team Selling Multilevel Selling Major Account Selling Sales Strategy: Team Selling

40. May replace field sales force for certain accounts When integrated with field sales force, activities include: Prospecting, Qualifying Leads, Conducting Surveys Taking Orders, Checking on Order Status, Handling Order Problems Following Up for Repeat Business Sales Strategy: Telemarketing

41. Generate Leads Test Market New Products Introduce New Products Close Sales Gather Competitive Information Service Existing Customers Enhance Corporate Image Sales Strategy: Trade Shows

42. Enhancing the brand • Trade shows are an excellent place to enhance the brand because of the personal contact that can occur. • Even with all the emailing and Internet communication most customers crave the personal contact of a sales call and conversation at a trade show.

43. Enhancing the brand • All the “personalization” efforts on the best interactive web sites cannot come close to the experience of a personal contact. • The larger the purchase the more the need to have some personal contact. • The more complex the transaction the more need for personal contact.

44. Integrating the trade show • Use the Internet to support your relationship marketing plan. • Develop an appropriate preview of your trade show exhibit and post it on the web about a month before the show and leave it up for a month afterwards. • Surveys show that more that 60 percent of attendees use the Internet to plan their trade show visits.

45. Focus Before going to a trade show try to be very clear who your market segment is and who it is not. If top management is unclear about exactly whom its target market is, spend some time with them to make it clear. Planning, executing and following up on the results of a trade show are infinitely easier if you have a good description of your target market segment.

46. Use the trade show • Introducing a new brand at a trade show is often an excellent idea because your most important buyers and potential partners are likely to attend and be in the right frame of mind to learn about your new offering. • Trade shows are excellent for maintaining awareness of the product with the primary buyers.

47. Trade shows are expensive Average annual trade show budget in 2001 $777,730 Average pay for exhibit managers was $60k for males and $48k for females

48. Mktg dollars in B2B Telemktg PR Direct mail 9% Field sales 47% Trade ads 12% Trade shows 14%