Introduction to Marketing - Session 4

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Distribution
 Direct and Indirect Selling Channels
 Types of Intermediaries: Direct Channel
 Types of Intermediaries: Indirect Channel
 Channel Development
 Channel Adaptation
 Channel Decisions
Marketing of Industrial Product also called:(B2B)
 Definition
Differences Between B2B and B2C
• Products/Services being marketed
• Nature of demand
• How the customer buys
• Communication process
• Economic/Financial factors
• Relationship Marketing
Marketing of Services
 What is a service?
 Difference between goods and services
Intangibility Inseparability, Heterogeneity and Perishability
 Services -
Business Services, Health Services, Professional Services and
Hospitality Services
• The role of marketing in a service firm
Sales and Field Force Management
• Sales Management defined
• Task and goals of the sales
• Sales Management Model
• Sales Management Trends
• Transaction Selling vs Relationship Selling
• Recruiting and Managing the field team
• Time and Territory Management
Personal Selling
 The most important promotional tool in B2B marketing
 Transaction/relationship is often too complex to consummate without personal interaction between marketer and buyer.
 Boundary Spanner
 Customers are sophisticated and you need a long-term relationship to be successful.
 B2B sales cost more than B2C selling

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  • India is not a major hub for manufacturing ‘tech products’, but is amongst the largest consumer. How would it be possible if: The producer / marketer did not identify this ‘need’ The producer / marketer did not find a ‘nearby’ manufacturing hub The producer / marketer did not find a way to make these products available in India. Example: Dell products.
  • Producers may not have knowledge of all markets. More often than not, the channel provides effective and inexpensive ways to reach end consumers and the information required to decide on such markets.
  • Speciality Store : Ex: The Body Shop, Croma Department Store : Ex: Big Bazaar Supermarket : Ex. Hypercity Convenience Store : Mom-and-pop stores, Kirana stores Non-Store Retailing : Direct Selling: Financial Services products (Ex: Mutual Funds) Direct Marketing Telemarketing: Cards Television Direct Response Marketing: TSN Network products Electronic Shopping: All internet stores Automatic vending: Not a concept in India yet Buying service: Catalogue marketing Corporate Retailing : Bulk retailers
  • Retailing in itself is a huge topic and there are specialist courses for retailing as a subject. With the advent of international trade and availability of investments across the world, logistics and channels have become increasingly important. How else would you have Aldo, Tag Heuer, Fossil, Benetton, FCUK etc in India?
  • Probably the biggest game-changer in marketing as it stands today. Selling / marketing / communicating etc has been made easy to a larger section of the public because of internet.
  • Forward & Backward Flow
  • Analyze Customers’ Desired Service Output Levels Lot size Waiting time Spatial convenience Product variety Service backup ===== Establish Objectives and Constraints Identify Major Channel Alternatives Types of Intermediaries Number of Intermediaries Exclusive distribution Exclusive dealing Selective distribution Intensive distribution ===== Terms and Responsibilities of Channel Members Price policy Conditions of sale Distributors’ territorial rights Evaluate the Major Alternatives Economic Criteria =====
  • Selection : Identification of candidates(trade sources, reseller enquiries) Development of selection criteria (knowledge (market, product, customer); market coverage; quality and size of sales force} Motivation : Motivate channel members to (act as distributors; Allocate adequate commitment and ;resources to producer’s lines) Possible motivators ( financial rewards; Territorial exclusivity Development of strong work relationship Training : Product knowledge Company knowledge Evaluation : Identification of shortfalls in distributor skills and Competencies; lack of distributors motivation Important for (retention, training and motivation decisions) Criteria include (sales volume and value; Profitability, Level of stocks, Quality and position of display) Managing Conflict : Sources of channel conflict: differences in goals; Differences in desired product line Avoiding and resolving conflict: training in conflict handling, Developing a partnership approach, Channel ownership, coercion
  • McDonalds in India has a logistics chain which is highly effective. The trucks never go empty. On way up to ‘picking up produce’ like lettuce, they deliver the buns (which are centrally produced) thereby achieving maximum efficiency.
  • DERIVED DEMAND •  The linkage between demand for a company’s output and its purchases of resources such as machinery, components, supplies, and raw materials. •  Example: Demand for computer microprocessor chips is derived from demand for personal computers. • Organizational buyers purchase two types of items: •  Capital items—long-lived business aspects that depreciate. •  Expense items—items consumed within short time periods. JOINT DEMAND •  Results when the demand for one business product is related to the demand for another business product used in combination with the first item. •  Example: If lumber supply falls, then decrease in construction will affect concrete market. INELASTIC DEMAND •  Demand throughout an industry will not change significantly due to a price change. •  Example: Construction firms will not necessarily buy more lumber if prices fall unless overall housing demand also increases. VOLATILE DEMAND •  Derived demand creates volatility. •  Example: Demand for gasoline pumps may be reduced if demand for gasoline slows.
  • Stage 1: Anticipate a Problem/Need/Opportunity and a General Solution • Example: Need to provide employees with a good cup of coffee to enhance productivity. Stage 2: Determine the Characteristics and Quantity of a Needed Good or Service •  Example: Offering a coffee system that brews one cup of coffee at a time according to each employee’s preference. Stage 3: Describe Characteristics and the Quantity of a Needed Good or Service •  Example: Firms need a simple system for brewing a good cup of coffee; quantity requirements are easily correlated to the number of coffee drinkers. Stage 4: Search for and Qualify Potential Sources • Choice of supplier may be fairly straightforward or very complex. Stage 5: Acquire and Analyze Proposals •  May involve competitive bidding, especially if the buyer is the government or a public agency. Stage 6: Evaluate Proposals and Select Suppliers •  Buyers choose proposal best suited to their needs. •  Final choice may involve trade-offs between feature such as price, reliability, quality, and order accuracy. Stage 7: Select an Order Routine • Buyer and vendor work out best way to process future purchases. Stage 8: Obtain Feedback and Evaluate Performance •  Buyers measure vendors’ performance. •  Larger firms are more likely to use formal evaluation procedures. •  Some firms rely on outside organizations to gather quality feedback and summarize results. •  Example: J. D. Power and Associates
  • It can be 5 times more expensive to attract a new customer than keeping an existing one! Satisfied “repeating customers” spread positive word-of-mouth (unhappy customers spread negative word-of-mouth!!! - also, it has been found that it is more likely that unhappy customers express their negative experiences than happy customers telling their positive experiences)
  • (1) Prospecting Identify the potential customers Making warm contacts rather than cold calling Leads - prospective customers. Prospects – before a contact, find they with potential. Qualified prospects – after a contact, find they with great potential. (2) Preparation and planning It is to look for: Customer’s buying criteria and needs Customer organisation’s purchasing structures The application of the product and the features and benefits required. (3) Initial contacts It is to build up mutual rapport, respect and trust between the buyer and seller before the formal and serious business discussion. Two approaches: Initial phone call for a meeting appointment Could calling/visiting for a lucky meeting arrangement (4) - Sales presentation It is to show how the product offering and the customer’s needs match. Stimulus response. Formula selling. Need satisfaction. (5) Handling typical objections Ask the objection back. Agree and counter. Boomerang. Feel, felt, found. Denial. (6) Types of negotiations Co-operative or win-win - trading concessions results in a better deal for both parties. Competitive negotiation - hard bargain focused on short term gain. (7) Types of sales closure It has reached the point where the customer agrees to purchase. Alternative close. Assumptive close. Time pressure close.
  • Introduction to Marketing - Session 4

    1. 1. Introduction to Marketing Week 4 NANDA KISHORE SETHURAMAN ITM SEPTEMBER 2012
    2. 2. Agenda Distribution  Sales and Field Force  Direct and Indirect Selling Management Channels  Task and goals of the sales  Types of Intermediaries:  Sales Management Models & Direct Channel Trends  Types of Intermediaries:  Transaction Selling vs Indirect Channel Relationship Selling  Channel Development  Time and Territory  Channel Adaptation Management  Channel Decisions  Personal Selling Marketing of Industrial  The most important Product also called:(B2B) promotional tool in B2B marketing  Differences Between B2B and B2C  Importance of interaction  Marketing of Services  B2B sales cost more than B2C selling?  The role of marketing in a service firm
    3. 3. Distribution
    4. 4. What is the need for a Marketing Channel?Many producers lack the financial resources to carry out direct marketingIn some cases direct marketing simply is not feasibleProducers who do establish their own channels can often earn a greater return by increasing their investment in their main business
    5. 5. Role of IntermediariesGreater efficiency in making goods available to target markets.Intermediaries provide  Contacts  Experience  Specialization  Scale of operationMatch supply and demand
    6. 6. What does a channel do?Key functions include:  Gather information about potential and current customers, competitors, and others  Develop and disseminate persuasive communications to stimulate purchasing  Reach agreements on price and other terms so that transfer of ownership or possession can be effected  Place orders with manufacturers  Acquire funds to finance inventories at different levels in the marketing channel  Assume risk connected with carrying out channel work  Provide for the successive storage and movement of physical products  Oversee actual transfer of ownership from one organization or person to another
    7. 7. What does a channel do?Breaking bulkReduce number of transactions and create bulk for transportAccessibility to marketsProvide specialist support service M C M C M C C M I M C M C
    8. 8. Channel intermediaries - WholesalersBreak down ‘bulk’  buys from producers and sell small quantities to retailersProvides storage facilities  reduces contact cost between producer and consumerWholesaler takes some of the marketing responsibility e.g sales force, promotions
    9. 9. WholesalingSelling and promotingBuying and assortment buildingBulk breakingWarehousingTransportationFinancingRisk bearingMarket informationManagement services and counseling
    10. 10. Wholesaler Marketing DecisionsTarget MarketProduct Assortment and ServicesPrice DecisionPromotion DecisionPlace Decision
    11. 11. Channel intermediaries - AgentsMainly used in international marketsCommission agent - does not take title of the goods. Secures orders.Stockist agent - hold ‘consignment’ stockControl is difficult due to cultural differencesTraining, motivation, etc are expensive
    12. 12. Channel intermediaries - RetailerMuch stronger personal relationship with the consumerHold a variety of productsOffer consumers creditPromote and merchandise productsPrice the final productBuild retailer ‘brand’ in the high street
    13. 13. Types of Retailers Specialty Store:  Narrow product line with a deep assortment. Department Store  Several product lines with each line operated as a separate department Supermarket  Relatively large, low-cost, low-margin, high volume, selfservice operation Convenience Store  Relatively small store located near residential area Nonstore retailing  Categories of nonstore retailing  Direct selling  Direct marketing  Telemarketing  Television direct-response marketing  Electronic shopping  Automatic vending  Buying service Corporate Retailing
    14. 14. RetailingMarketing DecisionsTarget MarketProduct Assortment and Procurement  Breadth  DepthProduct-differentiation Strategy Possibilities  Feature exclusive national brands that are not available at competing retailers  Feature mostly private branded merchandise  Feature blockbuster distinctive merchandise events  Feature surprise or ever-changing merchandise  Feature the latest or newest merchandise first  Offer merchandise customizing services  Offer a highly targeted assortment
    15. 15. Channel intermediaries - InternetSell to a geographically disperse marketAble to target and focus on specific segmentsRelatively low set-up costsUse of e-commerce technology (for payment, shopping software, etc)Paradigm shift in commerce and consumption
    16. 16. Six basic channel decisionsDirect or indirect channelsSingle or multiple channelsLength of channelTypes of intermediariesNumber of intermediaries at each levelWhich intermediaries? Avoid intrachannel conflict
    17. 17. Marketing Flows in the Channel
    18. 18. Channel-Design Decisions Analyzing Consumer Service Needs Analyzing Consumer Service Needs Setting Channel Objectives & Constraints Setting Channel Objectives & Constraints Identifying Major Alternatives Identifying Major Alternatives Intensive Intensive Selective Selective Exclusive Exclusive Distribution Distribution Distribution Distribution Distribution Distribution Evaluating the Major Alternatives Evaluating the Major Alternatives
    19. 19. The Value-Adds versus Costs of Different Channels
    20. 20. Channel Strategy•Market factors •Intensive distribution •Conventional channels •Buyer behavior, •use of all available markets •Independence of channel geographical concentration (e.g. cigarettes) members, little or no control of customers •Selective distribution (e.g. pricing, brand image)•Producer factors •use of a limited number of •Franchise operation •Available resources outlets in a geographical •Legal contract in which product mix offered area (e.g. computers) producer and channel•Product factors •Exclusive distribution intermediaries agree each a •Product size, bulky or •only one intermediary is member’s rights and difficult to handle? used in a geographic area obligations•Competitive factors (e.g. cars sold by only one •Channel ownership •Competitor’s control over dealer in each town) •By purchasing retail outlets, traditional distribution producers control their channels) purchasing, production and marketing activities
    21. 21. CHANNEL MANAGEMENT
    22. 22. Channel Behavior and ConflictThe channel will be most effective when:  Each member is assigned tasks it can do best.  All members cooperate to attain overall channel goals and satisfy the target market.Focus on individual goals leads to conflict  Horizontal Conflict occurs among firms at the same level of the channel.  Vertical Conflict occurs between different levels of the same channel.
    23. 23. Channel Management Decisions Selecting Selecting FEEDBACK Motivating Motivating Evaluating Evaluating
    24. 24. LogisticsInvolves entire supply chainIncreasing importance of logistics  Effective logistics is becoming a key to winning and keeping customers  Logistics is a major cost element for most companies  The explosion in product variety has created a need for improved logistics management  Information technology has created opportunities for major gains in distribution efficiency
    25. 25. Goals of Logistics systemProvide a Targeted Level of Customer Service atthe Least Cost.Maximize Profits, Not Sales. Higher Distribution Costs/ Higher Customer Service Levels Lower Distribution Costs/ Lower Customer Service Levels
    26. 26. Logistics FunctionsOrder ProcessingWarehousingInventory ManagementTransportationDesign system to minimize costs of attaining objectives
    27. 27. Transportation Modes Rail RailNation’s largest carrier, cost-effective Nation’s largest carrier, cost-effectivefor shipping bulk products, piggyback for shipping bulk products, piggyback Truck Truck Flexible in routing & time schedules, efficient Flexible in routing & time schedules, efficient for short-hauls of high value goods for short-hauls of high value goods Water Water Low cost for shipping bulky, low-value Low cost for shipping bulky, low-value goods, slowest form goods, slowest form Pipeline Pipeline Ship petroleum, natural gas, and chemicals Ship petroleum, natural gas, and chemicals from sources to markets from sources to markets Air Air High cost, ideal when speed is needed or to High cost, ideal when speed is needed or to ship high-value, low-bulk items ship high-value, low-bulk items
    28. 28. Selection considerationMarket segment - must know the specific segment and target customerChanges during plc - different channels are exploited at various stages of plcProducer-distributor fit - their policies, strategies and imageQualification assessment - experience and track record must be establishedDistributor training and support
    29. 29. B2B Marketing – An Introduction
    30. 30. What Is Marketing?The process of planning and executing theconception (product), pricing, promotion, anddistribution of ideas, goods, and services to createrelationships that satisfy individual andorganizational objectives.”
    31. 31. BUSINESS MARKETINGMarketing of Goods & Services to  Companies  Government Bodies  Institutions (ex: hospitals)  Non-Profit Organizations (ex”:CRY)For use in producing their products and / or to facilitate their operations
    32. 32. What Distinguishes B2B from B2C?B2B: Goods or services are sold for any use other than personal consumption Note: It is not the nature of the product; it is the reason for the transaction.
    33. 33. B2B versus B2C MarketingB2C=Business-to-Consumer Market= businesses sell products and services to consumers for household or personal useB2B=Business-to-Business Market= businesses sell products and services to other businesses for use in their daily operations or for making other products and services
    34. 34. NATURE OF THE BUSINESS MARKET
    35. 35. B2B or B2C?An individual buys MRF tyres for his 5 year old carMaruti buys MRF tyres for their new model of car being launched in 2 months.Your office buys Kinley water from Coca-Cola for the pantryYou start a playschool and buy travel cots for use in the school premises.
    36. 36. B2B versus B2C MarketingCharacteristic B2B Market B2C MarketSales volume Greater SmallerPurchase volume Greater SmallerNumber of buyers Fewer ManySize of individual buyers Larger SmallerLocation of buyers Concentrated DiffuseBuyer-seller relationship Closer More ImpersonalNature of channel More direct Less directBuying influences Multiple Single/MultipleType of negotiations More complex SimplerUse of reciprocity Yes NoUse of leasing Greater LessKey promotion method Personal Selling Advertising
    37. 37. B2B And DemandDERIVED DEMAND  The demand for a company’s products comes from (derived) the demand for their customer’s products.  Most demand comes from consumers.JOINT DEMAND  Two products are used together and demanded together – Both products are consumed at the same time Demand Inelastic Volatile
    38. 38. Major Uses of B2B ProductsFor additional production (e.g., components are combined into subassemblies and become part of the finished product)For use in operations, but not part of the finished productFor resale
    39. 39. Classifying Business Goods & Services3 Main Categories of ProductsEntering Goods  Become part of the finished product  Cost assigned to the manufacturing processFoundation Goods  Capital Items  Typically depreciated over timeFacilitating Products  Support organizational operations  Handled as overhead expenses
    40. 40. Classifying Business Goods & ServicesEntering GoodsRaw Materials  Farm products & natural products  Only processed as necessary for handling & transport  Require extensive processingManufactured Materials & Parts  Any product that has undergone extensive processing prior to purchase  Component Materials require additional processing  Component Parts generally do not require additional processing
    41. 41. Classifying Business Goods & ServicesFoundation GoodsInstallations  Major long-term investment items  Buildings, land, fixed equipment, etc.Accessory Equipment  Less expensive & short-lived  Not considered part of fixed plant  Portable tools, PC’s, etc.
    42. 42. Classifying Business Goods & ServicesFacilitating ProductsSupplies  Any supplies necessary to maintain the organization’s operationsServices  Maintenance & Repair support  Advisory support  Logistical support
    43. 43. Categories of B2B CustomersCommercial enterprises  Indirect channel members and facilitators  OEMs (original equipment manufacturers)  Users = customersGovernmental organizationsInstitutions
    44. 44. Characteristics of B2B customersThere are fewer customers and they require dependable relationships and a high level of service.Marketing tends to be done by personal selling ( one- on-one) calls to the customer.Specialized media such as trade journals, sales brochures, web sites, trade shows are used rather than traditional mass media.
    45. 45. Considerations of B2B BuyersBuyers must purchase according to a set of purchasing specificationsFocus on Quality (including certifications like ISO)Total costs to purchase and useReliabilityValue in useSavings possible via e-commerce
    46. 46. Purchasing Climbing Gear
    47. 47. The “Buying Center”Business purchases often involve multiple influence"Buying center"—all people who participate in or influence a particular purchaseBuying center varies from purchase to purchaseDoes not appear on the "organizational chart"Structure may be formal or informal
    48. 48. Multiple Roles in the Buying Center
    49. 49. Alcoa Aluminum—Three Products
    50. 50. Organisational Buying Process
    51. 51. Services Marketing
    52. 52. “There are no such thing as service industry. There are only industries whose service components are greater or less than those of other industries. Everybody is in service.” -Theodore Levitt
    53. 53. What is a service?It is intangible.It does not result in ownership.It may or may not be attached with a physical product
    54. 54. Physical goods Vs servicesPhysical goods ServicesTangible intangibleHomogeneous heterogeneousProduction and distribution are separated Production, distribution and consumptionfrom consumption are simultaneous processesA thing An activity or processCore value processed in factory Core value produced in the buyer-seller interactionCustomers do not participate in the Customers participate in productionproduction processCan be kept in stock Cannot be kept in stockTransfer of ownership No transfer of ownership
    55. 55. Products also have a service componentEquipment basedPeople based – varying skill levels
    56. 56. Most products have a service componentThey could beEquipment basedPeople based – varying skill levels
    57. 57. ServicesPersonal needs – haircuts, tuition, massage parlorsBusiness needs – courier services, office cleaning services, delivering fresh flowers
    58. 58. The three additional ‘P’s of Service MarketingPeoplePhysical evidenceProcess
    59. 59. Qualities & DifferentiationQualities  Search qualities  Experience qualities  Credence qualitiesDifferentiation  Offering  Faster and better delivery  Image
    60. 60. Managing Service qualityGap between  management perceptions and consumer expectations  management perceptions and service quality specifications  service quality specifications and service delivery  service delivery and external communication  expected service and perceived service
    61. 61. Determinants of service qualityReliability – delivering on promisesResponsiveness – willing to helpAssurance – inspiring trust and confidenceEmpathy – individualising customersTangibles- physical representation
    62. 62. Moments of truthIt is the customer – service encounterEvery positive or negative experience of the consumer would have fall-out on the overall service experienceIn services, the last experience remainsuppermost in the consumer’s mind.Therefore, it is not enough to be good,you have to be consistently good.
    63. 63. Importance-Performance AnalysisI Concentrate here Keep up the goodMP workORTA Low priority Possible overkillCE PERFORMANCE
    64. 64. Customer SatisfactionTheir satisfaction will be influenced by:  Encounters with service personnel  Appearance and features of service facilities – exterior and interior  Interactions with self service equipment  Characteristics and behaviour of other customersExpectations  Desired Service – the ‘wished for’ service  Adequate Service – the service that would be acceptable  Zone of Tolerance - Difference between the desired service and the adequate service
    65. 65. Service Encounter ThemesRecoveryAdaptabilitySpontaneityCoping
    66. 66. Recovery Don’t DoIgnore customer Acknowledge problemBlame customer Explain causesLeave customer to fend Apologise for himself Compensate/upgradeDowngrade Lay out optionsAct as if nothing is Take responsibility wrong‘pass the buck’
    67. 67. Adaptability Don’t DoPromise and fail to Recognise the keep them seriousnessShow unwillingness to Acknowledge try AnticipateEmbarrass the Accommodate customer AdjustLaugh at the customer Explain rules/policiesAvoid responsibility
    68. 68. Spontaneity Don’t DoExhibit impatience Take timeYell/laugh/swear Be attentiveSteal from customers Anticipate needsDiscriminate ListenIgnore Provide information Show empathy
    69. 69. Coping Don’t DoTake customer’s Listen dissatisfaction Try to accommodate personally ExplainLet customer’s Let go of the customer dissatisfaction affect others
    70. 70. Types of complainersVoicers IratesPassives Activists
    71. 71. Customer complaintsIt pays to resolve customer complaintsOn an average only 5 % dissatisfied customers complain. Others simply go over to the competitorA satisfied consumer speaks to an average of 3 people on his her experienceA dissatisfied consumer gripes to on an average 11 persons about his/her unpleasant experience
    72. 72. Sales Force Management
    73. 73. Personal Selling?Personal selling involves oral conversations, either by telephone or face-to-face, between salespersons and prospective customers.Roles:  Identifying decision makers, decision processes, and qualified buyers  Promoting to corporate, travel trade, and other groups  Generating increased sales at the point of purchase  Providing detailed and up-to-date information to the travel trade  Maintaining a personal relationship with key clients  Gathering information on competitors’ promotions
    74. 74. The Sales Process
    75. 75. Steps in the Sales Process Prospecting and qualifying Handling objections and prospective customers: questions:  Blind prospecting  Restate the objection  Cold calling or canvassing  Sales blitz  “Agree and neutralize” Lead prospecting tactic  Preplanning prior to sales Closing the sale. calls:  Verbal closing clues  Pre-approach  Non-verbal closing clues  The approach Presenting and Following up after demonstrating services: closing the sale.  Sales presentation  Demonstration
    76. 76. Sales Process
    77. 77. Sales Management
    78. 78. Sales ManagementDefinition:  Sales management is the management of the sales force and personal selling efforts to achieve desired sales objectives.Functions  Sales-force staffing and operations  Sales planning  Sales performance evaluation
    79. 79. Sales Management…Managing Sales ForceOffering Sales TrainingManaging Channel partnersManaging Direct salesManaging Sales PromotionManaging Sales TerritoriesManaging Sales Targets
    80. 80. Process
    81. 81. The sales management process
    82. 82. Designing the Sales ForceTypes of Sales Representatives  Deliverer  Order taker  Missionary  Technician  Demand creator  Solution vendor
    83. 83. Designing the Sales Force Objectives  Sales volume and Steps in Process profitability  Customer satisfaction StrategyObjectives and  Account manager strategy Type of sales forceStructure  Direct (company) or contractualSales force sizeCompensation
    84. 84. Designing the Sales Force Types of sales force Steps in Process structures:  TerritorialObjectives and  Product strategy  MarketStructure  ComplexSales force size Key accountsCompensation
    85. 85. Designing the Sales Force Steps in Process Workload approach:  Group customers by volumeObjectives and  Establish call frequencies strategy  Calculate total yearly sales call workloadStructure  Calculate average numberSales force size of calls/year  Calculate number of salesCompensation representatives
    86. 86. Designing the Sales Force Steps in Process Four components of compensation:  Fixed amountObjectives and  Variable amount strategy  Expense allowancesStructure  Benefits Compensation plansSales force size  Straight salaryCompensation  Straight commission  Combination
    87. 87. Managing the Sales ForceSteps in Sales Force Management  Recruitment and selection  Training  Supervising  Motivating  Evaluating
    88. 88. Managing the Sales Force - RecruitingRecruiting begins with the development of selection criteria  Customer desired traits  Traits common to successful sales representativesSelection criteria are publicizedVarious selection procedures are used to evaluate candidates
    89. 89. Managing the Sales Force - TrainingTraining topics include:  Company background, products  Customer characteristics  Competitors’ products  Sales presentation techniques  Procedures and responsibilitiesTraining time needed and training method used vary with task complexity
    90. 90. Managing the Sales Force - EvaluatingSuccessful firms have procedures to aid in evaluating the sales force:  Norms for customer calls  Norms for prospect calls  Using sales time efficiently  Tools include configurator software, time-and-duty analysis, greater emphasis on phone and Internet usage, greater reliance on inside sales force
    91. 91. Managing the Sales Force - MotivatingMotivating the Sales Force  Most valued rewards  Pay, promotion, personal growth, sense of accomplishment  Least valued rewards  Liking and respect, security, recognition  Sales quotas as motivation tools  Supplementary motivators
    92. 92. Managing the Sales Force - EvaluatingEvaluating the Sales Force  Sources of information  Sales or call reports, personal observation, customer letters and complaints, customer surveys, other representatives  Formal evaluation  Performance comparisons  Knowledge assessments
    93. 93. Personal Selling Principles Sales-oriented approach Major Aspects  Stresses high pressure techniquesSales Customer-oriented approach professionalism  Stresses customerNegotiation problem solving Steps in industrial sellingRelationship process marketing
    94. 94. Personal Selling Principles Reps need skills for Major Aspects effective negotiation Negotiation is usefulSales when certain factors professionalism characterize the saleNegotiation Negotiation strategy  PrincipledRelationship  BATNA marketing
    95. 95. Personal Selling Principles Building long-term Major Aspects suppler-customer relationships has grownSales in importance Companies are shifting professionalism focus away fromNegotiation transaction marketing to relationship marketingRelationship marketing
    96. 96. End of Day 4

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