Organizational Strategies & The Sales Function

Organizational StrategiesOrganizational Strategies& &

The Sales Function The Sales Function

Module ThreeModule Three

The Strategic Role The Strategic Role of the Sales of the Sales

FunctionFunction

The Importance of SalesThe Importance of Sales

The Sales function is the company’s primary The Sales function is the company’s primary ‘interface’ with its marketplace…‘interface’ with its marketplace…

and principal source of revenueand principal source of revenue

or its primary partner in completing the or its primary partner in completing the exchange process.exchange process.

Exchange FacilitatorsExchange Facilitators

The sales organization is designed The sales organization is designed

so that this 'interface function is best suited so that this 'interface function is best suited

to the larger needs & limitations of the total dynamic to the larger needs & limitations of the total dynamic

of the overall business organization.of the overall business organization.

Corporate Corporate StrategyStrategy

Corporate MissionCorporate MissionSBU DefinitionSBU DefinitionSBU ObjectivesSBU Objectives

Corporate Corporate ManagementManagement

Strategy Strategy LevelLevel

Key Key Decision AreasDecision Areas

KeyKeyDecision MakersDecision Makers

Strategic levels of an OrganizationStrategic levels of an OrganizationAt the Corporate levelAt the Corporate level




Marketing Marketing StrategyStrategy

Corporate Corporate ManagementManagement

Target Market SelectionTarget Market Selection

Marketing Mix Dev.Marketing Mix Dev.

Integrated Mkt Comm.Integrated Mkt Comm.

Strategic levels of an OrganizationStrategic levels of an OrganizationAt the Corporate levelAt the Corporate level

Sales Sales StrategyStrategy

Strategy TypesStrategy TypesStrategy ExecutionStrategy Execution

SBU SBU ManagementManagement

Business Business StrategyStrategy

SBU SBU ManagementManagement

Account Targeting StrategyAccount Targeting StrategySales Channel StrategySales Channel StrategyRelationship StrategyRelationship Strategy




At the SBU levelAt the SBU level

(SBUs) (SBUs) Strategic Business UnitsStrategic Business Units

A functional grouping of a single productA functional grouping of a single product

or brand, a line of products, or brand, a line of products,

or a mix of related products or a mix of related products

that meets a common market need that meets a common market need

or a group of related needs, or a group of related needs,

and the unit's management is responsible for all and the unit's management is responsible for all (or most) of the basic business functions.(or most) of the basic business functions.

Salary plus Salary plus incentiveincentive

1.1. Prospective and Prospective and new accountsnew accounts

2.2. Provide high Provide high service levels service levels particularly pre-particularly pre-sales servicesales service

3.3. Product/market Product/market feedbackfeedback

• Build sales Build sales volumevolume• Secure Secure distribution.distribution.

BuildBuild

SBU ObjectivesSBU Objectives & the & the Sales OrganizationSales Organization

Compensation Compensation SystemSystem

Primary Primary Sales TasksSales Tasks

Sales Sales Organization Organization ObjectivesObjectives

Market Market Share Share

ObjectivesObjectives

Salary plus Salary plus commission or commission or bonusbonus

1.1. Call on targeted Call on targeted current accountscurrent accounts

2.2. Incr. service Incr. service levels to current levels to current accountsaccounts

3.3. Call on new Call on new accountsaccounts

• Maintain sales Maintain sales vol.vol.• Consolidate Consolidate market position market position through through concentration on concentration on targeted segmentstargeted segments• Secure Secure additional outletsadditional outlets

HoldHold







Salary plus Salary plus bonusbonus

1.1. Service most Service most profitable profitable accountsaccounts

2.2. eliminate eliminate unprofitable unprofitable accountsaccounts

3.3. Reduce service Reduce service levelslevels

4.4. Reduce Reduce inventories inventories levelslevels

•Reduce selling Reduce selling costscosts•Target profitable Target profitable accountsaccounts

HarvestHarvest







SalarySalary1.1. Dump inventoryDump inventory

2.2. Eliminate serviceEliminate service

• Minimize Minimize selling costs selling costs and clear out and clear out inventoryinventory

Divest or Divest or LiquidateLiquidate







Business StrategyBusiness Strategy & the Sales & the Sales FunctionFunction

Low-cost supplierLow-cost supplier

1.1. Pursue large Pursue large customerscustomers

2.2. Minimize costMinimize cost

3.3. Compete on priceCompete on price

4.4. Seek customers who Seek customers who are low price are low price shoppersshoppers


• Low-cost supplierLow-cost supplier

DifferentiationDifferentiation

1.1. Compete on non-price Compete on non-price benefitsbenefits

2.2. Provide high quality Provide high quality customer servicecustomer service

3.3. Seek customers who Seek customers who are not low price are not low price shoppersshoppers


• Low-cost supplierLow-cost supplier

• DifferentiationDifferentiation

NicheNiche

1.1. Serve a distinct target Serve a distinct target market not served well market not served well by othersby others

2.2. Provide high quality Provide high quality customer servicecustomer service

3.3. Seek customers who Seek customers who are not low price are not low price shoppersshoppers

Marketing StrategyMarketing Strategy & the Sales & the Sales FunctionFunction

AdvantagesAdvantages+ Only promotional tool that consists of Only promotional tool that consists of

personal communication between seller personal communication between seller and buyerand 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

IMCIMCIntegrated Marketing Integrated Marketing

CommunicationsCommunicationsThe ‘third P’ ~ PromotionsThe ‘third P’ ~ Promotions

The Promotional -MixThe Promotional -Mix

•AdvertisingAdvertising

•Public Relations Public Relations

•Internet / InteractiveInternet / Interactive

•Personal SellingPersonal Selling

•Direct MarketingDirect Marketing

The Promotional-MixThe Promotional-MixFor the best IMCFor the best IMC

Which ‘tools’ to useWhich ‘tools’ to use

& &

when?when?

Personal Selling-Driven vs. Personal Selling-Driven vs. Advertising-DrivenAdvertising-Driven (IMC) Strategies (IMC) Strategies

AdvertisingAdvertising

Personal SellingPersonal Selling

When Message Flexibility is ImportantWhen Message Flexibility is ImportantWhen Message Timing is ImportantWhen Message Timing is ImportantWhen Reaction Speed is ImportantWhen Reaction Speed is ImportantWhen Message Credibility is ImportantWhen Message Credibility is ImportantWhen Trying to Close the SaleWhen Trying to Close the Sale

When Low Cost per Contact is ImportantWhen Low Cost per Contact is ImportantWhen Repetitive Contact is ImportantWhen Repetitive Contact is ImportantWhen Control of Message is ImportantWhen Control of Message is ImportantWhen Audience is LargeWhen Audience is Large

Target Market Situations &Target Market Situations &Personal SellingPersonal Selling

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

Personal Selling-Driven Promotional Strategies Personal Selling-Driven Promotional Strategies are appropriate when:are appropriate when:

– The market consists of only a few buyers that tend The market consists of only a few buyers that tend to be concentrated in locationto be concentrated in location

– The buyer needs a great deal of informationThe buyer needs a great deal of information– The purchase is importantThe purchase is important– The product is complexThe product is complex– Service after the sale is importantService after the sale is important

BuyingBuyingSituationSituation

BuyingBuyingCenterCenter

OrganizationalOrganizational

Buyer BehaviorBuyer BehaviorAccountAccount

BuyingBuyingProcessProcess

BuyingBuyingNeedsNeeds

AccountAccount TargetingTargeting

StrategyStrategy

RelationshipRelationship

StrategyStrategy

SalespersonSalespersonSalesSales

StrategyStrategy

Sales ChannelSales Channel

StrategyStrategy

SellingSelling

StrategyStrategy

The Sales Strategy FrameworkThe Sales Strategy Framework

Business Business or or

Industrial Industrial OrganizationsOrganizations

Major CategoryMajor Category TypesTypes

UsersUsers: purchase products : purchase products and services to produce and services to produce other products and servicesother products and services

Organizational Buyer BehaviorOrganizational Buyer Behaviori)i) Types of OrganizationsTypes of Organizations

Original Equipment Original Equipment Manufacturers (OEM)Manufacturers (OEM):: purchase products to purchase products to incorporate into productsincorporate into products

ResellersResellers: purchase : purchase products to sellproducts to sell

Government Government OrganizationsOrganizations

Major CategoryMajor Category TypesTypes

Federal, Provincial Federal, Provincial and Local and Local Government Government AgenciesAgencies

Organizational Buyer Behavior:Organizational Buyer Behavior: ii)ii) Types of OrganizationsTypes of Organizations

Public and Public and Private InstitutionsPrivate InstitutionsInstitutionsInstitutions

Organizational Buyer Behavior Organizational Buyer Behavior iii) Buying Situationsiii) Buying Situations

Straight RebuyStraight Rebuy Buying Situation Buying Situation– Routinized Response BehaviorRoutinized Response Behavior

Modified RebuyModified Rebuy Buying Situation Buying Situation– Limited Problem SolvingLimited Problem Solving

New TaskNew Task Buying Situation Buying Situation– Extensive Problem SolvingExtensive Problem Solving

Organizational Buyer Behavior: Organizational Buyer Behavior: iv) iv) The “Buying Centre”The “Buying Centre”

• InitiatorsInitiators• UsersUsers• GatekeepersGatekeepers• InfluencersInfluencers• DecidersDeciders• PurchasersPurchasers

Organizational Buyer BehaviorOrganizational Buyer Behaviorv) The Buying Processv) The Buying Process

Phase 1: Recognize Problem/NeedPhase 1: Recognize Problem/Need

Phase 2: Determine Item Specs/Quantity NeededPhase 2: Determine Item Specs/Quantity Needed

Phase 3: Specify Item Specs/Quantity NeededPhase 3: Specify Item Specs/Quantity Needed

Phase 4: Identify and Qualify Potential SourcesPhase 4: Identify and Qualify Potential Sources

Phase 5: Acquire and Analyze ProposalsPhase 5: Acquire and Analyze Proposals

Phase 6: Evaluate Proposals/Select SuppliersPhase 6: Evaluate Proposals/Select Suppliers

Phase 7: Selection of Order RoutinePhase 7: Selection of Order Routine

Phase 8: Performance Feedback/EvaluationPhase 8: Performance Feedback/Evaluation

Sales Strategy:Sales Strategy:a) Account-Targeting Strategya) Account-Targeting Strategy

The classification of The classification of accounts withinaccounts within

a target market into a target market into categories forcategories for

the purpose of developing the purpose of developing strategic approaches for strategic approaches for selling to each account or selling to each account or

account group.account group.

Sales Strategy:Sales Strategy:b) Relationship Strategyb) Relationship Strategy

A determination of A determination of

the type of the type of relationship relationship

to be developed to be developed with different with different

account groups.account groups.

TransactionTransaction SolutionsSolutions PartnershipPartnership CollaborativeCollaborative

Characteristics of Relationship Characteristics of Relationship StrategiesStrategies

GoalGoal Sell ProductsSell Products Add ValueAdd Value

Time Time FrameFrame

ShortShort LongLong

OfferingOffering StandardizedStandardized CustomizedCustomized

Number of Number of CustomersCustomers ManyMany FewFew

Sales Strategy / Selling Sales Strategy / Selling StrategyStrategy

Ensuring that Ensuring that accounts receive accounts receive

selling effortselling effort coverage in an coverage in an

effective and efficient effective and efficient manner.manner.

Matching Selling & Relationship Matching Selling & Relationship StrategiesStrategies

TransactionTransaction

SolutionsSolutions

PartnershipPartnership

CollaborativeCollaborative

CommitmentCommitment

Cost Cost to to

ServeServe

HighHigh

HighHigh

LowLow

Sales Strategy & Sales Sales Strategy & Sales Channel StrategyChannel Strategy

The planned selling approach for each The planned selling approach for each relationship strategy.relationship strategy.

– The InternetThe Internet– Industrial DistributorsIndustrial Distributors– Independent RepresentativesIndependent Representatives– Team SellingTeam Selling– TelemartketingTelemartketing– Trade ShowsTrade Shows

Sales Strategy & The InternetSales Strategy & The Internet

• Increase ReachIncrease Reach• Gather Information about Gather Information about

CustomersCustomers• Showcase New ProductsShowcase New Products• Conduct SurveysConduct Surveys• Enhance Corporate ImageEnhance Corporate Image• Obtain FeedbackObtain Feedback• Service Existing CustomersService Existing Customers

Sales Channel Strategy & Sales Channel Strategy & Industrial DistributorsIndustrial 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

Sales Strategy with Sales Strategy with Independent or Independent or

Manufacturers’ RepsManufacturers’ Reps

• Sell complimentary products Sell complimentary products from non-competing from non-competing manufacturers.manufacturers.

• Do Not Normally Carry InventoryDo Not Normally Carry Inventory• Paid for PerformancePaid for Performance• Reduced Control over Selling Reduced Control over Selling

EffortEffort• Reduced Access to Customer Reduced Access to Customer

InformationInformation

Sales Strategy & Team SellingSales Strategy & Team Selling

Three Selling SituationsThree Selling Situations1.1. New Task SellingNew Task Selling

2.2. Modified Resell Selling Modified Resell Selling SituationSituation

3.3. Routine Resell Selling Routine Resell Selling SituationSituation

Two Types of Team SellingTwo Types of Team Sellinga)a) Multilevel SellingMultilevel Selling

b)b) Major Account SellingMajor Account Selling

Sales Strategy & Sales Strategy & TelemarketingTelemarketing

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

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

– Prospecting, Qualifying Leads, Prospecting, Qualifying Leads, Conducting SurveysConducting Surveys

– Taking Orders, Checking on Order Taking Orders, Checking on Order Status, Handling Order ProblemsStatus, Handling Order Problems

– Following Up for Repeat BusinessFollowing Up for Repeat Business

Sales Strategy & Trade ShowsSales Strategy & Trade Shows

• Generate LeadsGenerate Leads• Test Market New Test Market New

ProductsProducts• Introduce New ProductsIntroduce New Products• Close SalesClose Sales• Gather Competitive Gather Competitive

InformationInformation• Service Existing Service Existing

CustomersCustomers• Enhance Corporate Enhance Corporate

ImageImage

Organizational Strategies & The Sales Organizational Strategies & The Sales FunctionFunction

Exchange ArtistsExchange Artists

• Strategic levels of an OrganizationStrategic levels of an Organization• SBU ObjectivesSBU Objectives & the Sales Organization & the Sales Organization• Business StrategyBusiness Strategy & the Sales Function & the Sales Function• Marketing StrategyMarketing Strategy &the Sales Function &the Sales Function• For the best IMC Which ‘tools’ to use & when?For the best IMC Which ‘tools’ to use & when?• Organizational Buyer BehaviorOrganizational Buyer Behavior

i)i) Types of OrganizationsTypes of Organizations

• Sales Channel Strategy &…Sales Channel Strategy &…

Documents

Organizational Strategies & The Sales Function