S2 Selling Strategy

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Selling StrategyInterface between Place and

Promotion

Module Two


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Session Objectives

Strategic sales management

The External Environment

The Internal EnvironmentOrganisational Strategy Levels


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SALES INTERFACE

SALES FORCE

EXTERNAL

ENVIRONMENT

Economic

Social Cultural

Technological

Competitive

Legal Political

Natural

CUSTOMERS

CORPORATE AND

MARKETING STRATEGY

DISTRIBUTION

CHANNELS

INTERNALENVIRONMENT

Goals/Objectives/Cultures

Personnel

Financial Resources

Production and

Supply Chain

Service Capabilities

R&D

ADVERTISINGAnd

PROMOTION


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Strategic Marketing Planning Company Objective

Increase market share from present 8% to 20%

Company Strategy

Intensify marketing efforts in domestic markets

Marketing Objective

Increase sales revenue by Rs. 30 crores next

year

Marketing Strategy

Enter South and EastCover existing markets more aggressively

Strategy for one level becomes objective for next

level


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External Environment

Economic Conditions

Buyer-seller interactions take place

within the context of currenteconomic conditions

The economy impacts real potential

demand

Global economic conditions are

important


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Social and Cultural

Population characteristics

Unequal rate of growth

Increase in average age

Changing geographic distribution

Increased education attainment

Increased number of working women

The nucleus family

Lower loyalties


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Technological Factors

Transportation

The 2 wheeler and 4 wheeler boom

The high cost of travel

The traffic jams Communications

Telephones

Internet

Voice mail

SMS

Computers

Database for prospect

Order processing

MIS and reports


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Competitive Factors

Need to know

Who is the competitorLowering trade barriers

Monopoly to Oligopoly to

Perfect competition


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Legal and Political

Towards a free economy

MRTP (Competition Bill)

Packaging and Commodities Act

Excise and Customs

Sales Tax

VAT

Buyer Protection

Consumer Courts


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Natural Environment

Nature influences demand for productsWeather

Natural disastersAvailability of raw materials

Energy resources

Demarketing may result from shortages

caused by natureGrowing social concern about the

possible negative impact of product andproduction have important implications

for marketing and sales programs


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Internal Environment

Goals/Objectives/Culture

Mission and objectives drive customer

management approachesA well-defined mission + successful

corporate history + top management

values = strong corporate culture


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Internal Environment

Personnel

Modern sales organizations are highly

complex and dynamicOften difficult to expand to take advantage

of growing markets

Utilizing outside specialists can help firmsmeet need to expand


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Financial Resources

Lack of financial resources can:

constrain ability to develop new products

limit promotional budgetlimit size of sales force


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Production and Supply Chain Capabilities

Production capacity

Location of production facilities

Transportation costsAbility to ensure seamless distribution and

service after the sale


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Service Capabilities

Opportunity for strong competitive

advantage

Difficult for other firms to compete forsame customers

Customers reluctant to switch regardless

of price


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R&D and Technological Capabilities

Excellence in design and engineering

provide major promotional appeal

Ability to communicate technologicalsophistication as value-add helps prevent

over-reliance on price to get sales


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BuyingBuying

SituationSituation

BuyingBuying

CenterCenter

OrganizationalOrganizational

Buyer BehaviorBuyer BehaviorAccountAccount

BuyingBuyingProcessProcess

BuyingBuying

NeedsNeeds

AccountAccountTargetingTargetingStrategyStrategy

RelationshipRelationship

StrategyStrategy

SalespersonSalespersonSalesSales

StrategyStrategy

Sales ChannelSales Channel

StrategyStrategy

SellingSelling

StrategyStrategy

The Sales Strategy Framework


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CorporateCorporate

StrategyStrategy

Corporate MissionCorporate MissionSBU DefinitionSBU Definition

SBU ObjectivesSBU Objectives

CorporateCorporate

ManagementManagement

SalesSales

StrategyStrategy

Strategy TypesStrategy Types

Strategy ExecutionStrategy Execution

SBUSBU


StrategyStrategy

LevelLevel

KeyKey

Decision AreasDecision Areas

KeyKey

Decision MakersDecision Makers

Organizational Strategy Levels


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StrategyStrategy

LevelLevel

KeyKey

Decision AreasDecision Areas

KeyKey

Decision MakersDecision Makers

MarketingMarketing

StrategyStrategy

CorporateCorporate


Target Market SelectionTarget Market Selection

Marketing Mix Dev.Marketing Mix Dev.

Integrated Mkt Comm.Integrated Mkt Comm.

BusinessBusinessStrategyStrategy

SBUSBUManagementManagement

Account Targeting StrategyAccount Targeting StrategySales Channel StrategySales Channel Strategy

Relationship StrategyRelationship Strategy

Organizational Strategy Levels


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Definition of

Strategic Business Units (SBUs)

Cravens (1991)Cravens (1991)

An SBU is a single product or brand, a line ofAn SBU is a single product or brand, a line of

products, or a mix of related products thatproducts, or a mix of related products that

meets a common market need or a group ofmeets a common market need or a group of

related needs, and the unit's management isrelated needs, and the unit's management is

responsible for all (or most) of the basicresponsible for all (or most) of the basic

business functions."business functions."


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Salary plus

incentive

Prospective and

new accounts

Provide high

service levels

particularly pre-

sales serviceProduct/market

feedback

Build sales vol.

Secure

distribution

Build

SBU Objectives and

the Sales Organization

Compensation

System

Primary

Sales Tasks

Sales

Organization

Objectives

Market

Share

Objectives


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Salary plus

commission

or bonus

Call on targeted

current accounts

Incr. service levels to

current accounts

Call on new accounts

Maintain sales vol.

Consolidate

market position

through

concentration on

targeted segmentsSecure additional

outlets

Hold

SBU Objectives and


Compensation

System

Primary

Sales Tasks

Sales

Organization

Objectives

Market

Share

Objectives


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Salary plus

bonus

Service most

profitable accounts

eliminate

unprofitable

accounts

Reduce servicelevels

Reduce inventories

levels

Reduce selling

costs

Target profitable

accounts

Harvest

SBU Objectives and


Compensation

System

Primary

Sales Tasks

Sales

Organization

Objectives

Market

Share

Objectives


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SalaryDump inventory

Eliminate service

Minimize sellingcosts and clear

out inventory

Divest orLiquidate

SBU Objectives and


Compensation

System

Primary

Sales Tasks

Sales

Organization

Objectives

Market

Share

Objectives


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Business Strategy and

the Sales Function

Low-cost supplier Pursue large customersPursue large customers

Minimize costMinimize cost

Compete on priceCompete on price

Seek customers who areSeek customers who are

low price shopperslow price shoppers


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the Sales Function

Low-cost supplier

Differentiation

Compete on nonCompete on non--priceprice

benefitsbenefits

Provide high qualityProvide high quality

customer servicecustomer service


not low price shoppersnot low price shoppers


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the Sales Function

Low-cost supplier

Differentiation

Niche

Serve a distinct targetServe a distinct target

market not served well bymarket not served well byothersothers

Provide high qualityProvide high quality

customer servicecustomer service


not low price shoppersnot low price shoppers


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Marketing Strategy and

the Sales Function

Advantages

+ Only promotional tool that consists ofpersonal 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 closedDisadvantage

High cost per contact


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Personal Selling-Driven vs. Advertising-Driven

Marketing Communications Strategies

AdvertisingAdvertising

Personal SellingPersonal Selling

When Message Flexibility is ImportantWhen Message Flexibility is Important

When Message Timing is ImportantWhen Message Timing is Important

When Reaction Speed is ImportantWhen Reaction Speed is ImportantWhen Message Credibility is ImportantWhen Message Credibility is Important

When Trying to Close the SaleWhen Trying to Close the Sale

When Low Cost per Contact is ImportantWhen Low Cost per Contact is Important

When Repetitive Contact is ImportantWhen Repetitive Contact is ImportantWhen Control of Message is ImportantWhen Control of Message is Important

When Audience is LargeWhen Audience is Large


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Target Market Situations and

Personal Selling

Target Market:A definition of the specific market segment to be served

Personal Selling-Driven Promotional Strategiesare appropriate when:The market consists of only a few buyers that tend to

be concentrated in location

The buyer needs a great deal of informationThe purchase is important

The product is complex

Service after the sale is important


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Classification of

Personal Selling Approaches

Stimulus Response

Mental States

Need Satisfaction

Problem Solving

Consultative Selling


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Stimulus Response Selling

SalespersonSalesperson

ProvidesProvides

StimuliStimuli

BuyerBuyer

ResponsesResponses

SoughtSought

ContinueContinue

Process untilProcess until

PurchasePurchase

DecisionDecision


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Mental States Selling

AttentionAttention InterestInterest ConvictionConviction DesireDesire ActionAction


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Need Satisfaction Selling

Uncover andUncover and

Confirm BuyerConfirm Buyer

NeedsNeeds

PresentPresent

Offering toOffering to

Satisfy BuyerSatisfy Buyer

NeedsNeeds

ContinueContinue

Selling untilSelling until

PurchasePurchase

DecisionDecision


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Problem Solving Selling

DefineDefine

ProblemProblem

GenerateGenerateAlternativeAlternative

SolutionsSolutions

ContinueContinue

SellingSellinguntiluntil

PurchasePurchase

DecisionDecision

EvaluateEvaluateAlternativeAlternative

SolutionsSolutions


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Long-term Ally

Consultative Selling

Strategic Orchestrator

Business Consultant

The process of helpingThe process of helping

customers reach theircustomers reach theirstrategic goals by usingstrategic goals by using

the products, service,the products, service,

and expertise of theand expertise of the

selling organization.selling organization.


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The Sales Process:

Selling Strategy

In order to be successful in todays global businessIn order to be successful in todays global business

environment, salespeople must also think and actenvironment, salespeople must also think and act

strategically. The must develop strategies for:strategically. The must develop strategies for:

Their Sales TerritoryTheir Sales Territory

Each Sales CallEach Sales Call

Each CustomerEach Customer


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The Sales Process: An

Overview

Salesperson

Attributes

DevelopingDeveloping

CustomerCustomer

RelationshipsRelationships

InitiatingInitiating

CustomerCustomer


EnhancingEnhancing

CustomerCustomer


SellingSelling

FoundationsFoundations

SellingSelling

StrategyStrategy


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SELLING

MODEL


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INTERRELATIONSHIP OF BASIC

STRATEGIES


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A SELLING PARTNER

Prepares strategically

Asks questions

Restates customer needsTeams with support people

Negotiates win-win

Exceeds customer expectations

Re-examines relationship


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Documents

S2 Selling Strategy