2167 Class 9 Marketing and Sales

8/8/2019 2167 Class 9 Marketing and Sales

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Business Decision MakingADMN2167

Marketing and sales

Professor: Bob Carpenter


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Marketing and Sales


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Marketing vs.Sales

Corporate awareness

Brand awarenessBrand Consideration

Brand Preference

Purchase Intention

PurchaseLoyalty

Advocacy

Marketing

Sales


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Marketing and Sales in Conflict?

Sales and Marketing functions evolve ascompany matures

Can end up with sales in marketing andmarketing in sales. (depends on the industryand the product)

Friction can occur as a result of : Economics and shared budget

Cultural differences . Different sorts of people


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Four Types of Relationship

Undefined

Defined Aligned

Integrated

See HBR Ending the War betweenMarketing and Sales


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Research into Sales

Learning International has researched:

How customers are changing and how sales staffdevelop stronger business relationships with

them

How the competitive environment is changing

and how organizations can differentiatethemselves


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Research into Sales (2)

Customers are:

More knowledgeable More analytical and systematic

Need agreement at higher levels in the

organization

More demanding about what they want and value

More willing to share information


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Research into Sales (5)

Sales staff competencies and characteristics:

Personality Skills

Attitudes

Other characteristics


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Determinants of Salespeoples Performance


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Typical Sales Cycle: Tasks Performed Through Sales Process

Lead Generation Triggered by sales call, by customers response to direct mail, or

by Web request for information, firm makes initial contact with

prospect.

Lead Qualification Potential customer screened: prospects need for product or

service, buying interest, funding, and timeframe for making thepurchase all assessed.

Bid and Proposal Bid and Proposal prepared to meet customers requirements (a

complex task for large technical projects)

Negotiations and Sales

Closure

Negotiation of prices, terms, and conditions, followed by

agreement on a binding contract.

Fulfillment For standardized product or service, delivery of offering to

customer. Configuration, customization, and installation for more

complex sales.

Customer Care and Support Post-sale problem resolution, customer guidance, and ongoing

contact to ensure customer retention, loyalty, and growth.

SOURCE: Adapted from Lawrence G. Friedman, Go To Market Strategy: Advanced Techniques and Tools for Selling More Products, To More Customer, More Profitably (Boston:

Butterworth-Heinemann, 2002), pp. 234-236.


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Direct and Indirect Channels

Direct Indirect

r: ep:aster

Dist:

Ind: Dist

tocks

Ind: Dist

o stocks

anu acturer or rincipal

Web

based

utsideales

Inside

sales

ustomers

utsourced

Telesales


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Channel Integration Map:Salestask

Channel

Leadgeneration

Qualification Bid &proposal

Negotiation/sale closure

Fulfi llment Customer care& support

Direct saleschannel(field reps)

Businesspartners

Telechannels

Direct mail

Internet

Sales Cycle

$$$

$

Occasional supportby sales reps to

help partners

close keystrategic deals


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Channel Management

Must choose channel participants and arrange to

ensure all obligations are assigned. Motivate members to perform tasks necessary to

achieve channel objectives.

Control any inter-channel conflict

Control and evaluate performance regularly


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Direct or Indirect?

Criteria for channel decisions


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Decision Criteria for Channels

Product fulfillment complexity

Extend of product customization Accessibility

National vs. international

Cost Customer preferences/wishes

Concentration vs. horsepower


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Organizing TerritoriesGeographical Organization Most common form If reduces travel distance and time between customers, this method usually

minimizes costs.

Major disadvantage of geographical sales organization: each salesperson mustbe able to perform all selling tasks for all firms products and for allcustomers in territory.

Product Organization Salespersons specialize in relatively narrow components of total product line.

Prime benefit: enables sales force to develop deeper product knowledge level--enhances value of firms total offering to customers

Market-Centered Organization Salespeople learn specific requirements of industry or customer type;

salespeople better prepared to identify and respond to buying influentials.


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Direct Sales Used When:

Product and service are complex so that seller needed

to ensure proper fulfillment

Sales demand extensive negotiation

Segments are concentrated and ROI on direct costs is

good

There are no viable indirect channel partners

Financially better deal


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Distributor Channel Used When:

Product availability is important.

Product is standard or software modifiable.

Local value added is important to customer

Product needs to be seen to sell.

Good fit with speciality distributors.

Advantageous to pass off credit issue to distributor


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Manufacturers Rep: Used When:

Product is not standard--closer to made-to-order.

Product has identifiable companions sold by MR to aparticular industry.

MR serves customers beyond direct cost reach.

Relatively few customers, concentrated geographically

and concentrated in few industries. Customers order relatively infrequently and allow fairly

long lead times.


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Direct or Indirect?

Pros and Cons


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Cons of Indirect Selling

Lose customer intimacy/visibility/ownership

Lose control of salesperson management Share sales staff with other principals

Pay greater amount for coverage when sales

have grown

Difficult to change back to direct


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Needs Satisfaction Selling - Opening

Your goal in opening is to reach agreement

with the customer on what will be coveredduring the visit

Propose an agenda

State the value to the customer (of the agenda)

Check for acceptance


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Needs Satisfaction Selling - Probing

Use open and closed questions to understand

circumstances and needs.

Open probes obtain richer information

Search for the need behind the need


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Direct Sales Force Management Issues

Selection

Training Motivating

Weed and feed policy

Pricing discretion

Whose customer is it?

Setting goals and expectations


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Indirect Sales Force Management Issues

Selection

Training Motivating battle for mind space

Weed and feed policy

Pricing discretion




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Selection Indirect

Where do you find a partner?

How do you evaluate potential partner? How do you get them started?


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Factors Limiting Choice of Industrial Channel

Availability of Good Intermediaries

Traditional Channel Patterns

Product Characteristics

Company Financial Resources

Competitive Strategies

Geographic Dispersion of Customers


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Training

Direct trained in product

Indirect have to train several staff (e.g.Y

ou aregetting 1/10th of 10 people)

To be effective with indirect, you need

windshield time

Indirect should already know selling, industry

and customers


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Motivating

Direct can be intrinsically and extrinsically

motivated

Indirect is a battle for mind space.

Indirect you must work through management

to control rewards as directly as possible

Other products in indirects product offering

competes with their own incentives


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Pricing Discretion

Direct can be some discretion but concern

about selling on price

Indirect must have protecton in multi-channel

situation

Who determines price, indirect or principal

Difficult to change indirects


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Direct can sign non compete, no poach

agreement

Indirect has greater ownership of customer

than does principal

Can you access customer on any subject or

have you foregone that right


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Direct should have clear goals agreed and

close monitoring

Indirect should have clearly documented

expectations, goals and division of tasks. What

should be included?

Indirect goals may be with its managementrather than reps:


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Ethics in Selling

You are selling an expensive ($23.5M) piecefabrication line to a business in an African country

where it is customary to show appreciation to thedecision taker by contributing to his/her personalwealth. There are 4 other bidders, 2 from WesternEurope, 1 from South Korea and 1 from Brasil. Youhave an in country agent who looks after customerrelations. The agent requests a commission structure

which is 3% above his normal rate and says that it willbe OK if the price is raised 3%. Hes in the know andthat is why you recruited him. What would you do?

Documents

2167 Class 9 Marketing and Sales