2167 Class 9 Marketing and Sales
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Transcript of 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
Whose customer is it?
Setting goals and expectations
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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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Whose customer is it?
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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Setting goals and expectations
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?