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Organizational Strategiesand the Sales Function

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(Exhibit 4.1)

Organizational Strategy Levels

Strategy Level Key Decision Areas Key Decision Makers

Corporate Strategy Corporate Mission

SBU Definition

SBU Objectives

Corporate Growth Orientation

Corporate Management

Business Strategy Strategy Types

Strategy Execution

SBU Management

Marketing Strategy Target Market Selection

Marketing Mix Development

Integrated Mkt Communications

Marketing Management

Sales Strategy Account Targeting Strategy

Relationship Strategy

Sales Channel Strategy

Sales Management

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Definition of

Strategic Business Units(SBUs)

Cravens (1991) (def): "a single

product or brand, a line ofproducts, or a mix of relatedproducts that meets a commonmarket need or a group ofrelated needs, and the unit'smanagement is responsible forall (or most) of the basic

business functions."

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4SBU Objectives and the SalesOrganization(Exhibit 4.2)

SalaryDump inventory

Eliminate service

Minimize selling costsand clear out inventory

Divest/Liquidate

Salary plus bonus

Call on and servicemost profitableaccounts only andeliminate unprofitableaccounts

Reduce service levels

Reduce inventories

Reduce selling costs

Target profitableaccounts

Harvest

Salary plus commissionor bonus

Call on targetedcurrent accounts

Increase servicelevels to currentaccounts

Call on new accounts

Maintain salesvolume

Consolidate marketposition throughconcentration ontargeted segments

Secure additional

outlets

Hold

Salary plus incentiveCall on prospectiveand new accounts

Provide high servicelevels particularly pre-sale service

Product/marketfeedback

Build sales volume

Secure distribution

Build

Recommended

CompensationSystem

Primary Sales TasksSales Organization

Objectives

Market Share

Objectives

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Generic Business Strategies

(Porter) Low Cost

Differentiation

Niche

Business Strategy and the Sales

FunctionBusiness Strategy Types

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Marketing Strategy and the Sales

Function Advantages

Only promotional tool that consists of personalcommunication 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 closed

Disadvantage

COST

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Personal Selling-Driven vs.Advertising-DrivenMarketing Communications Strategies

Advertising

Personal Selling

When Message Flexibility is Important

When Message Timing is Important

When Reaction Speed is Important

When Message Credibility is Important

When Trying to Close the Sale

When Low Cost per Contact is Important

When Repetitive Contact is Important

When Control of Message is Important

When Audience is Large Figure 4.2

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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 PromotionalStrategies are appropriate when: The market consists of only a few buyers that

tend to be concentrated in location

The buyer needs a great deal of information

The purchase is important The product is complex

Service after the sale is important

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(Figure 4.4)

The Sales Strategy Framework

Buying Situation

AccountTargetingStrategy

Buying CenterRelationship

Strategy

Organizational

Buyer BehaviorAccount Salesperson

Sales

Strategy

Buying Process

Buying Needs

Sales ChannelStrategy

Selling

Strategy

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Sales and Service Philosophy

(4:06)

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(Exhibit 4.6)

Organizational Buyer Behavior

Types of OrganizationsMajor Category Types

Users - purchase products and services toBusiness

orIndustrial Organizations

produce other products and services

Original Equipment Manufacturers (OEM)

purchase products to incorporate into

products

Resellers - purchase products to sell

Government Organizations Federal, State, and Local Government

Agencies

Institutions Public and Private Institutions

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Organizational Buyer Behavior

Buying Situation

Straight Rebuy Buying Situation

Routinized Response Behavior

Modified Rebuy Buying Situation Limited Problem Solving

New Task Buying Situation

Extensive Problem Solving

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Organizational Buyer Behavior

Buying Center Initiators

Users

Gatekeepers

Influencers

Deciders

Purchasers

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(Exhibit 4.7)

Personal and Organizational Needs

Personal Goals Organizational Goals

Want a Feeling of Power Control Cost in Product Use Situation

Seek Personal Pleasure Few Breakdowns of Product

Desire Job Security Dependable Delivery for Repeat Purchases

Want to be Well Liked Adequate Supply of Products

Want Respect Cost within Budget Limits

Organizational buying is goal directed.

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Sales Strategy

Account-Targeting Strategy

The classification of accountswithin a target market into

categories for the purpose ofdeveloping strategicapproaches for selling toeach account or account

group

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Sales Strategy

Relationship Strategy

A determination of the type of

relationship to be developedwith different account groups

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(Exhibit 4.8)

Characteristics of

Relationship Strategies

Relationship Relationship RelationshipTransaction Solutions Partnership Collaborative

Relationship

Goal Sell Products Add Value

Time Frame Short Long

Offering Standardized Customized

Number ofCustomers

Many Few

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Sales Channel Strategy

Industrial distributors

Independent reps

Internet Company salesforce

Team selling

Telemarketing Trade shows

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Sales Channel Strategy

Industrial Distributors

Channel middlemen

Take title to goods

Own salesforce

May represent onemanufacturer; several non-

competing manufacturers;several competingmanufacturers

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Sales Channel StrategyIndependent RepresentativesManufacturers Reps

Sell complimentary products fromnon-competing manufacturers

Do not carry inventory, do not taketitle to products they sell

Sell purely on commission

Cost versus control issue

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Sales Channel StrategyInternet

Most companies not replacing salesreps w/Internet, but integratinginternet into multiple channelstrategy or using it to enhance/assistsales reps

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Sales Channel Strategy

Team Selling

Three Selling Situations

New Task Selling

Modified Resell Selling Situation

Routine Resell Selling Situation

Two Types of Team Selling

Multilevel Selling Major Account Selling

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(Figure 4.7)

Team Selling and Buying Centers

Selling Firm Buying Firm

Sales Team SalespersonExchangeProcesses

PurchasingAgent

OrganizationalBuying Center

MarketingSalesInformation

Purchasing

Problem SolvingManufacturing Negotiation Manufacturing

R & D FriendshipTrust

R & D

Engineering Product/Services EngineeringPhysical

DistributionPayment

ReciprocityMarketing

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(Figure 4.8)

Uses of Telemarketing

Replace FieldSalesforce for

Certain Accounts

Integrate withField Salesforce

Selling to SameAccounts

ActivitiesC ProspectingC Qualifying LeadsC Conducting SurveysC

Taking OrdersC Checking on OrderStatus

C Handling OrderProblems

C Following Up forRepeat Business

Telemarketing

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Trade Shows

Average Cost/Visitor $185