Strategic Sales Force Management

“In Order to achieve marketing objectives, the sales force must be seen as an integral part of the marketing strategy”

The Marketing System

A marketing system operates within a framework of forces its environment. Two Sets of Forces1. External Environment• Demography• Economic condition • Socio Cultural Factors• Political-Legal Factors• Technology Competition

Continuation…..

2. Internal Variables in Marketing System The company’s resources in non-marketing areas The components of it’s marketing mix

Marketing Mix describe the combination of four ingredients that constitute the core of a

company’s marketing system. When effectively blended, these four - formOf a marketing program designed to provide want-satisfying goods and

services to the company’s market. Product Price Distribution Promotion

Continuation…….

Promotional Mix – major elements are:

• a.) Advertising• b.) Sales Promotion• c.) Personal selling effort

The Marketing Concept and Marketing Management

Marketing Concept – three fundamental beliefs• Customer or Marketing oriented• Organizationally coordinated• Profitable sales volume over the long run

Marketing Management and its Evolution Chief marketing executives – responsible for planning, implementing,

and coordinating all marketing activities and integrating them into the overall operations of the firms. These process is called marketing management.

Four stages in the evolution of marketing management Production Oriented-stage

the executive in production and engineering shape the company’s objectives and planning.

Sales Orientation-Stage

the main problem in our economy was no longer the ability to make or grow enough products. Rather, the problem was selling this output.

Continuation….

Marketing Orientation-Stage directed toward the twin goals of customer satisfaction and

profitable sales volume.

Relationship Orientation-Stage buyer and seller make a commitment to each other to do

business over a long time period rather than view each sales as a discrete transaction.

• Understanding customer expectations

• Building service partnerships

• Empowering employees

• Total quality management

Relationship Marketing

Relationship Marketing

Understanding customer expectationsCompanies must be able to identify what the customer want and market a product to them that exceeds their expectation

Relationship Marketing

Building service partnershipsCompanies must work closely with their customers to add information and services beyond their traditional products to increase the value of their offerings to customers.

Relationship Marketing

Empowering employeesCompanies must encourage and reward their salespeople for taking initiative and using creativity in helping solve customer problems.

Relationship Marketing

Total quality managementThis is the process by which the company strives to improve customer satisfaction through the continuous improvement of all its operation.

Integrating Marketing and Sales Functions

Sales force – is an invaluable source of information which marketing should draw upon in designing product/marketing strategies.

Marketing – is charged with the responsibility of providing the sales force with the marketing tools they need to sell more effectively, such as advertising, support services, and sales promotions.

“Sales people have the primary responsibility for implementing marketing strategies.”

Integrating and Production Sales

Sales plans provide the basis of production forecasts – materials requirements and production schedules are developed based on sales forecasts.

Strategic Planning• Objectives -are the goals around which a strategic plans is

formulated.

• Strategies - or plans of action, are developed to achieve the objectives.

• Tactics - activities which must be performed by the people in order to carry out the strategy.

Strategic Planning at the Company, Marketing, and Sales Force levels

The strategic planning on all level in the firm should be well integrated and highly coordinated

Strategic Planning for the Total CompanyStrategic Planning for the total company involves determining the organizations mission, the Board Objectives (Goals) that will enable the company to fulfill its mission, and the strategies and tactics needed to achieve the objectives.

Strategic Planning for the Total Company

1st Determine the company’s mission2nd Management set broad goals consistent with that missionExample: The company may aim to earn a 20% ROI next year or to increase its market share from 8% to 20% in 3 years.3rd Select the strategy to be used to reach the goal

Goals Possible Strategies1. Earn 20% ROI next year. a. Reduce production and

marketing costsb. Increase rate of capital

turnover2. Increase market share form 8% to 20% in 3 years

a. Intensify marketing efforts in domestic markets

b. Expand into foreign markets

c. Buy out a competitor

Strategic Marketing Planning

Once the total company planning process is completed, essentially the same procedure can be repeated for the marketing Program the Goals, Strategies, and Tactics at the Marketing level are closely related to those at the corporate level.Company Goal Company Strategy Marketing Strategy

1. Earn 20% ROI Cut marketing costs by 15% this year

Reduce direct selling efforts by using wholesalers to reach small accounts

2. Increase market share from present 8% to 20%

Intensify marketing efforts in domestic markets

Enter new markets

Sales Force Strategy Once the strategic planning process for the entire Marketing Program has been completed, the role of the sales has largely been established.

Corporate Goal: Increase market share from 8% to 20% in two years

Corporate Strategy (Marketing Goal):

Intensify market efforts in domestic markets to increase sales volume by 3M next year

Marketing Strategy (sales force goal):

a. Enter new geographic markets and sell to new types of customers, or

b. Cover existing geographic markets more aggressively

Sales Force Strategy Whether the company selects to pursue marketing strategy a or b will make a big difference in the choice of the sales strategies and tactics

Marketing Strategy Sales Force Strategy

Sales force Tactics

a. Enter new markets

Build long-term customer relations

1. Stress missionary selling in sales training and supervision

2. Stress salary element in compensation plan.

b. Sell aggressively in existing markets

Increase sales force motivation

1. Conduct more sales contests

2. Stress commission feature in sales plan

3. Increase field supervision

Strategic Trends

1. Multiple Sales Channels- These methods may be used to reach different segments of customers or to perform various selling tasks necessary to efficiently serve one segment.

2. Multiple Relationship Strategies- These can vary from one in which the sale is just an individual transaction to one in which the company develops a close long-term relationship or even a partnership with the customers.

•Transaction Selling- Sales People emphasize the product,Its quality, and the price.

•Relationship Selling- Sales people develops in depth-knowledge of their customer’s company and business.

•Partnership- Companies from strategic alliances in order to joint goals

3. Systems Selling- is a strategy adopted by firms in response to the customers desire for solutions. This strategy involves selling a total package of goods and services and the related expertise.

4. Team Selling- Is composed of one or more sales people as well as other functional specialists, such as design engineers, financial experts, customer service representatives and quality control engineers.