Sales Management 4

Strategic Roles Strategic Roles

Sales and Sales ManagementSales and Sales Management

Integrated Marketing

Make sure the Four Ps match.Make sure the Four Ps match. If selling on price, can’t have most If selling on price, can’t have most

expensive ingredients.expensive ingredients. Make sure all marketing communications Make sure all marketing communications

are working together.are working together. Same message in ads, sales, literature, Same message in ads, sales, literature,

PR, promotionsPR, promotions

General Business Strategies and Their Implications

Type of Strategy Sales Force Implications

PORTER’S TYPOLOGYLow Cost SupplierAggressive construction of efficient-scale facilities, vigorous pursuit of cost reductions from experience, tight cost and overhead control, usually associated with high relative market share.

Servicing large current customers, pursuing large prospects, minimizing costs, selling on the basis of price, and usually assuming significant order-taking responsibilities.

DifferentiationCreation of something perceived industrywide as being unique. Provides insulation against competitive rivalry because of brand loyalty and resulting lower sensitivity to price.

NicheService of a particular target market, with each functional policy developed with this target market in mind. Although market share in the industry might be low, the firm dominates a segment within the industry.

To become experts in the operations and opportunities associated with the target market. Focusing customer attention on nonprice benefits and allocating selling time to the target market.

Selling nonprice benefits, generating orders, providing high quality of customer service and responsiveness, possibly significant amount of prospecting if high growth industry, selecting customers based on low price sensitivity. Usually requires a high quality sales force.

Low Cost

Differentiation

Niche

Nose Warmers

Carving a Niche in Life

Niche

4th Strategy Type: Middle of the Road

Middle-of-the-Road Strategy

Standing in the middle of the road is dangerous; you get

knocked down by traffic from both sides.

-  Margaret Thatcher

This strategy leads to:

Road Kill

Road Kill

Miles and Snow Typology

Prospector

Attempt to pioneer in product/market development. Offer a frequently changing product line and be willing to sacrifice short-term profits to gain a long-term stronghold in their markets.

DefenderOffer a limited, stable product line to a predictable market. Markets are generally in the late growth or early maturity phase of the product life cycle. Emphasis is on being the low-cost producer through high volume

Analyzer

Choose high growth markets while holding onto substantial mature markets. Analyzers are an intermediate type of firm. They make fewer and slower product market changes than prospectors, but are less committed to stability and efficiency than defenders.

Prospector

Primary focus is on sales volume growth. Territory management emphasizes customer penetration and prospecting

Defender

Maintain the current customer base. Very little prospecting for new customers is involved. Customer service is emphasized along with greater account penetration.

Analyzer

Must balance multiple roles: servicing existing customers, prospecting for new customers, uncovering new applications, holding onto distribution of mature products and support campaigns for new products.

Marketing Strategy andthe Sales Function AdvantagesAdvantages

Only promotional tool that consists of personal Only promotional tool that consists of personal communication between seller and buyercommunication between seller and buyer

More credible and has more impactMore credible and has more impact Better timing of message deliveryBetter timing of message delivery Ability to tailor message to buyerAbility to tailor message to buyer Allows for sale to be closedAllows for sale to be closed

DisadvantageDisadvantage High cost per contactHigh cost per contact

Large SmallNumber and Dispersion of Customers

Low HighBuyers’ Information Needs

Small LargeSize and Importance of Purchase

Little MuchPostpurchase Service Required

Low HighProduct Complexity

Pull PushDistribution Strategy

Pre-set NegotiatedPricing Policy

Many FewResources Available for Promotion

AdvertisingRelatively Important

Personal SellingRelatively Important

Sources of Increased Profit from Loyal Customers

0

20

40

60

80

100

120

0 1 2 3 4 5 6 7

Why loyal customers are more profitable

ReferralsPrice premium

Lower costs

Increased sales volumeInitial sales

Years as a customerCost of new customer

Contribution to profits

Using the Internet in Sales

Increase ReachIncrease Reach

Gather Information about CustomersGather Information about Customers

Showcase New ProductsShowcase New Products

Conduct SurveysConduct Surveys

Enhance Corporate ImageEnhance Corporate Image

Obtain FeedbackObtain Feedback

Service Existing CustomersService Existing Customers

Industrial Distributors

Have Their Own Sales ForceHave Their Own Sales Force

May Represent One Manufacturer; May Represent One Manufacturer; Several Non-competing Manufacturers; Several Non-competing Manufacturers; Several Competing ManufacturersSeveral Competing Manufacturers

Normally Carry InventoryNormally Carry Inventory

Independent/Manufacturers’ Reps

Sell complimentary products from non-Sell complimentary products from non-

competing manufacturers.competing manufacturers.

Do Not Normally Carry InventoryDo Not Normally Carry Inventory

Paid for PerformancePaid for Performance

Reduced Control over Selling EffortReduced Control over Selling Effort

Reduced Access to Customer InformationReduced Access to Customer Information

Team Selling

Two Types of Team SellingTwo Types of Team Selling

–Multilevel SellingMultilevel Selling

–Major Account SellingMajor Account Selling

Telemarketing

May replace field sales force for certain accountsMay replace field sales force for certain accounts

When integrated with field sales force, activities When integrated with field sales force, activities include:include:

Prospecting, Qualifying Leads, Conducting Prospecting, Qualifying Leads, Conducting

SurveysSurveys

Taking Orders, Checking on Order Status, Taking Orders, Checking on Order Status,

Handling Order ProblemsHandling Order Problems

Following Up for Repeat BusinessFollowing Up for Repeat Business

Trade Shows

Generate LeadsGenerate Leads

Test Market New ProductsTest Market New Products

Introduce New ProductsIntroduce New Products

Close SalesClose Sales

Gather Competitive InformationGather Competitive Information

Service Existing CustomersService Existing Customers

Enhance Corporate ImageEnhance Corporate Image