Organizational Strategies & The Sales Function Module Three The Strategic Role of the Sales...
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Transcript of Organizational Strategies & The Sales Function Module Three The Strategic Role of the Sales...
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
Strategy Strategy LevelLevel
Key Key Decision AreasDecision Areas
KeyKeyDecision MakersDecision Makers
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
Strategy Strategy LevelLevel
Key Key Decision AreasDecision Areas
KeyKeyDecision MakersDecision Makers
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
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 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
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
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
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
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
Business StrategyBusiness Strategy & the Sales & the Sales FunctionFunction
• 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
Business StrategyBusiness Strategy & the Sales & the Sales FunctionFunction
• 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 &…