Sales Channels


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This was developed for Business Policy & Strategy at Portland State University. Most textbooks talk about channels from a conceptual standpoint. In this piece we expand the discussion to talk about B to B vs. B to C, sales funnels, and compensation. It could use a little more depth on types of retail stores if anyone has the content, would be happy to add it.

Published in: Business, Technology

Sales Channels

  1. 1. BA 495BA 495Sales ChannelsW
  2. 2. S i k i d lStrategic Marketing ModelThe Offering2
  3. 3. Place: Sales ChannelsU d t d C t S i l R i tE i ti St thUnderstand Customer& Buying BehaviorSpecial RequirementsImposed by ProductExisting Strength& Role of BrandMaturity and InvestmentExisting ChannelsChannelChannel Cost &SelectionChannel Cost &Margin AvailableSupportedb P tiSlide 3by Promotion
  4. 4. Channels: Market SelectionB to GB to BB to C“E t i ” “SMB”Slide 4“Enterprise” or “SMB”
  5. 5. Consumer Markets Business MarketsChannels: Market SelectionConsumer Markets• Demographic factors• Socioeconomic factorsBusiness Markets• Industry segments (SIC)• Product segments• Socioeconomic factors• Geographic factors• Psychological factors• Product segments• Geographic segments• Common buying factors• Psychological factors• Consumption patternsG t M k t• Common buying factors• Customer size segmentsGovernment Markets• Military/AerospaceFederal Government• Campaigns/Elections5• Federal Government • State/Local
  6. 6. B C Ch lB to C Channels*Producer ConsumerProducer ConsumerRetailerProducer ConsumerRetailerDistributorProducer ConsumerRetailerWholesaler DistributorSlide 6* Different channels can be used for sales & fulfillment
  7. 7. B C Ch lDirectB to C ChannelsProducer ConsumerIndirectProducer ConsumerRetailer*IndirectProducer ConsumerRetailerDistributorProducer ConsumerRetailerWholesaler DistributorSlide 7* Can take the form of a franchise like McDonald’s
  8. 8. B B/G Ch lB to B/G ChannelsB to BProducer BusinessB to B B to B B to BProducer BusinessRetailer*IndustrialDistributorValue Added Reseller(VAR)Producer BusinessManufacturersRepSystems IntegratorsProducer BusinessManufacturersRepIndustrialDistributorSlide 8* Non-traditional examples: Office Depot, UPS Store, FedEx Office, LazerQuick, …
  9. 9. B C I l d B B T iB to C Includes B to B TransactionsB to CProducer ConsumerB to B B to B B to BProducer ConsumerRetailerB to B B to B B to BProducer ConsumerRetailerDistributorProducer ConsumerRetailerWholesaler DistributorSlide 9
  10. 10. R il S lRetail SalesRetail Store SelectionRetailer ConsumerSupermarket Full-Line Discount SpecialtyGeneral MerchandiseFoodSupercenter Category Specialist^ DepartmentConvenienceCompany Store*Drug Off-PriceExtreme ValueCompany Store*p yWarehouse Clubp y^ Includes “big box retailers” and “category killers”10* Company owned or franchise common in the fast food industry but can apply more broadlySource: modified from Marketing, 2nd edition, Grewal, D., Levy, M., 2010
  11. 11. R il S lRetail SalesProduct/Brand AwarenessRetailer ConsumersignagesignageinsertscouponsSlide 11
  12. 12. P tiPromotion“Push” vs. “Pull”Create Awarenessand DemandSupplierP hDemandP llPush PullProper “Mix”RequiredBuild ChannelActivitySlide 12
  13. 13. B B/G Ch l• Indirect (“Channels”)B to B/G Channels• Indirect ( Channels )• Direct SalesDirect Sales Force (Traditional)– Direct Sales Force (Traditional)– Internet (Disintermediation)– Company StoreCompany Store• Direct Response– Direct MailDirect Mail– Infomercials– Catalogs…Cata ogsSlide 13
  14. 14. iPromotionCompliment ChannelOnlineemailwebsite newsletterradiotelevisiontelesalesOfflinebwebinareventstradeshowviralaffiliatesmagazineinfomercialpromotiondiscountbannersocialmediablogs wikipressoutdoordirectmailyellowpagescouponsportaldirectorysearchengineauction articlesreleasepublicrelationsmail pagessportsword-of-mouthSlide 14engine articlesnewspapermarketing
  15. 15. Di t S lDirect Sales“Process” of (Consultative) SellingSEO emailPPCdirect mail televisionPR web siteOffline Onlineviralbannersaffiliatestelesalesprintradiooutdoorinfomercialcoupons auctionmarketplacesocialand more….and more….AIDA SalesAIDAprocessSalesFunnelSales
  16. 16. Di S lDirect SalesSales “Team”• Sales/Account Executive*– “Hunters” vs. “Farmers”– Commission vs. Quota• Sales EngineerSales skills +– Sales skills +– Technical skills• Field Marketingg• Product Marketing• Sales DevelopmentSlide 16* Telesales can also serve as primary account executives
  17. 17. Di S lDirect SalesSales Compensationover-quotaover-ridebonusi itargetcompensationquotaover quotadriver:multiple commission“at risk”driver:- sales- units- marginmultiplequota’spossiblebase- …Slide 17Lot’s of variations possible…
  18. 18. Di S lDirect SalesOpportunity OwnershipMarketsExisting NewsExisting SalesSalesDevelopmentProductsDevelopmentPNew MarketingBusinessDevelopmentSlide 18
  19. 19. Di t S lDirect Sales“Process” of Selling StageProspectDataMarketingStagepOpportunityQualified LeadershipOpportunityProposalOwne“Farm”SalesClientSales“Hunt”FarmProduct & Market Dependent
  20. 20. Di t S lDirect Sales“Process” of SellingDataDepends onIndustry, Product,and CustomerProspectQualified Leadand CustomerOpportunityProposalSalesCycleSalesClientnote: retail talks more about inventory “turns”
  21. 21. M k i SMarketing SupportSales ToolsProspect StageMessaging matrixMarketing campaignsLead scoringSupport Each Stage inThe Sales ProcessLead scoringOpportunity StageSales presentationProduct demonstrationC titi l iCompetitive analysisObjection handlerProposal StagePrice listQuote templateCost justification worksheetExecutive presentationClient Stage21Client StagePeriodic communicationNew promotionsSales
  22. 22. S l F i & MSales Forecasting & ManagementImplementationPlanningData 100%ImplementationPromotionPlanPlanningProspectQualified Lead30%10%LeadScoringFi i lPlanOpportunityProposal5%2%FinancialModelSalesProposalClient2%2%SalesForecastC t R l ti hi M tCustomer Relationship Management(CRM) software commonly used today
  23. 23. S l F i & MSales Forecasting & ManagementLead Scoring• Rank Opportunities– Product Need– Existing Budget– Purchase TimelineA i R k B d A ti• Assign Rank-Based ActionsA: Need, Budget, 30-day Close …… “Hot” - FocusB: Need Budget NurtureB: Need, Budget …… NurtureC: Need …… Inform
  24. 24. Direct ResponseROI DrivenThe Offer20%ResponseRecipe20% RecipeROI DrivenLCV FocusLCV FocusThe List70% The Creative70% The Creative10%
  25. 25. Ch l S l iChannel SelectionOther Considerations• Product Complexity– Shrink WrapC l t i Ch l– Complete in Channel– Custom Solution• Product Price/Margin• Product Price/Margin– High Price Increases Perceived Risk– Direct Sales Expensive Channel– Channel Layers Add Cost• Sales CycleSlide 25
  26. 26. Ch l C fliChannel ConflictCompetition “IN” ChannelConsumerInternetConsumerBest BuyWholesaler DistributorHPConsumerCostcoConsumerSafewayWholesaler DistributorP&GSlide 26
  27. 27. l h l kMulti-Channel MarketingCisco Systemsy27Source: Marketing of High-technology Products and Innovations, Mohr, Jakki J., SanjitSengupta, and Stanley F. Slater, Chapter 9, Page 316
  28. 28. l h l kMulti-Channel MarketingOnline EnterpriseLeadGeneratorsPostcardsCall ListspQualifiedLeadsSign-upsViralMarketingOrdersQuotesJobsQuotesBusinessDevelopmentAffiliatesAccountManagement OperationsMarketingGoogle AdwordsProductionFacilitiesSmall $$AccountsWebGoogle AdwordsOnline AffiliatesPromotionsNewsletterSEOWebSiteSmall BusinessOrders