Chapter 1.ppt

Part One:
Strategic Planning
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
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Sales Management: Shaping Future Sales Leaders
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Introduction to
Sales Management
Chapter 1

1-3
Learning Objectives
 Define strategy hierarchy and understand how sales and
marketing strategies affect overall strategy
 Identify different types of selling strategies and how the
selling process varies
 Describe the sales management process and
responsibilities and activities of sales managers

1-4
The Future for sales and sales force
management is pretty bright.
 Many consumer believe the sales profession not a noble endeavor.
 Business customers have a better appreciation for selling profession,
because these buyers rely on salespeople to bring them solutions to the
business problems that challenge them.
 Product knowledge, technical expertise, and business acumen are all
required to satisfy customers' needs.
 Sales positions are hardest to fill.
 Sales consumes >20% of a firm’s revenue.
 as a career opportunity, starting in sales is an excellent choice.
 Many CEOs got their start in sales.
 Sales mangers tends to earn more than their counterparts in other areas,
moreover, sales jobs will grow at much faster rate than other professions.

1-5
From Sales Rep to Sales Manager
 “Manager of people”
 Sales success is poor
predictor of success as
sales manager
 Most successful sales
reps are eventually
pressured to make the
transition to sales mgmt
“This is a decision that
must be carefully
analyzed because it’s not
an easy transition to go
from being a player to a
coach.”

1-6
What Being a Sales Manager Means
Coaching  Coaching salespeople so they can improve
Developing
 Developing strategies and delegating the
responsibility for implementation to others
Motivating
 Figuring out how to motivate people, some who
are older than you
Convincing
 Convincing others in the organization that what is
right for the sales force is right for their
departments, too

What is Sales Management ?
1-7
• Sales Management: is the activities required to lead, direct, or supervise
the personal selling efforts of an organization.
• This textbook primary objective is to explain this function of managing
salespeople. And due to the importance of having a good strategy, this
textbook also discusses many of the day-to-day tasks that sales managers
do to further a firm’s strategy goals.
•Isn’t it important to study the selling process and selling skills?
• Yes it is extremely important, because selling is the essence of Sales
Management science. Moreover, in marketing orientated companies sales
are seen to be part of the marketing concept.
•So we will include two chapters from another textbook during our
discussion.

Important terms
1-8
What is the strategy ?
it is a plan designed to accomplish a mission.
What is the mission ?
It is a set of objectives.
- If your objective is to arrive at time to your 8 O’clock class, then what will be your
strategy to achieve this mission ( objective) ?

1-9
Establishing the Parameters of the
Firm’s Strategy: The Mission Statement
 Inspire the members of an organization
 Give purpose to their actions
 Guide their decision-making
 Serve as a standard against which decisions
can be weighed
 Once the mission’s objectives are set, strategy
can be created

1-10
Sample Mission Statements
 Everything we do is inspired by our
enduring mission:
 To Refresh the World . . . in body, mind, and spirit
 To Inspire Moments of Optimism . . . through our
brands and our actions
 To Create Value and Make a Difference . . .
everywhere we engage
 The mission of Southwest Airlines is
dedication to the highest quality of
Customer Service delivered with a sense of
warmth, friendliness, individual pride, and
Company Spirit
 Coca-Cola
 Southwest
Airlines

1-11
The Strategy Hierarchy
 Corporate Strategy encompasses plans and goals for
the entire organization
 Address questions in a general sense, such as what
markets and sourcing options company should engage
 Ex: hire sales force vs. use distributors
 Ex: outsource mfg and focus internally on marketing
 Business units create their plans to support corporate
strategy.
 The flow of the strategy from the organizational level to
the units is called the Strategy Hierarchy.

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Corporate
Strategy
Marketing Strategy
Sales Strategy
The Strategy Hierarchy

1-13
At the marketing level, planners have to answer the following
questions.
Markets  What markets do we serve with what products?
Relationships
 What types of relationships do we form and with
whom?
Investment
 What level of investment will be required, and
how will we locate and allocate the needed
resources?
Objectives
 What are the detailed objectives and action
plans?

1-14
What Markets Do We Serve with
What Products?
 Find a sustainable competitive advantage
 Need expertise, technology or a patent.
 Sustainable competitive advantage is something that gives a company
an edge in the market overtime.
 Competitive advantage : the results of a company matching a core
competency to opportunities it has discovered in the market.
 Core competency: things a firm does extremely well, which sometime
give it an advantage over its competition.

1-15
Product-Market Grid: achieving growth via
products and markets.
Examples : new countries,
new industries.

Product-Market Grid: achieving growth
via products and markets.
1-16
Note: the risk associated with diversification are far greater
than with other market expansion approaches, why?
Simply, because it requires developing both new products and
new market.

1-17
What Types of Relationships Do We
Form and with Whom?
 Strategic plan considers network of
relationships
 Investors, potential investors, bankers
 Suppliers
 Personnel sources
 Regulatory agencies
 Relationship with customers is most
important.
 Customers’ lifetime value is worth
more than the average single
purchase. (try to extend the
relationship as much as you can.)
 A service advantage is often a
function of the quality of relationships

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Customer Relationship Management
(CRM): Key Terms
 CRM: identifying and grouping customers to best acquire, retain, and grow
customers
 Sales and marketing teams are responsible for CRM
 Customer acquisition strategy: plan to obtain new customers.
- can include marketing activities such as telephone prospecting and
attending trade shows to identify potential customers.
 Customer retention strategy: plan designed to keep customers.
- might include making quarterly visits to current customers or inviting them
to technology shows to see the firm’s newest products.
 Growth strategy: plan designed to increase sales to the same customers.
- these might include offering special discounts to customers when they
make larger purchases.

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South Atlantic Ocean
South Pacific Ocean
North Pacific Ocean
North Atlantic Ocean
Indian Ocean
Arctic Ocean Arctic Ocean
Arctic Ocean
North Pacific Ocean
United States of America
U.S.A.
Canada
Mexico
Brazil
U. S. A.
French Polynesia (Fr.)
Argentina
Uruguay
Paraguay
Chile
Bolivia
Peru
Ecuador
Colombia
Venezuela
French Guiana (Fr.)
Suriname
Guyana
The Bahamas
Cuba
Dominican Republic
Panama
Costa Rica
Nicaragua
Honduras
Guatemala
El Salvador
Trinidad and Tobago
Jam.
Haiti Puerto Rico (US)
Greenland (Den.)
Iceland
Madagascar
South Africa
Lesotho
Swaziland
Mozambique
Tanzania
Botswana
Namibia Zimbabwe
Angola
Zaire
Zambia
Malawi
Burundi
Kenya
Rwanda
Uganda
Congo
Gabon
Somalia
Ethiopia
Sudan
Djibouti
Belize
Egypt
Libya
Chad
Niger
Algeria
Mali
Tunisia
Nigeria
Cameroon
C. A. R.
Benin
Togo
Ghana
Burkina Faso
Barbados
Dominica
Côte D’Ivoire
Liberia
Sierra Leone
Guinea
Guinea-Bissau
Senegal
The Gambia
Mauritania
Western Sahara (Mor.)
Morocco
Finland
Norway
Sweden Estonia
Latvia
Lithuania
Poland
Romania
Bulgaria
Turkey
Greece
Czech.
Hung.
Italy
Albania
Portugal
France
Spain
Aus.
Switz.
United Kingdom
Ireland
Den.
Germany
Neth.
Bel.
Cyp.
Yemen
Oman
Saudi Arabia
U. A. E.
Qatar
Iran
Iraq
Syria
Jordan
Israel
Leb.
China
Mongolia
Russia
Afghanistan
Pakistan
India
Sri Lanka
Maldives
Nepal
Bhu.
Myanmar (Burma)
Bang.
Andaman Islands (India)
Thailand
Indonesia
Malaysia
Brunei
Philippines
Taiwan
Cambodia
Vietnam
Laos
Australia
Papua New Guinea
New Zealand
Fiji
New Caledonia
Solomon Islands
Kiribati
Marshall Islands
Federated States of Micronesia
Guam (USA)
Japan
N. Korea
S. Korea
Kuril Islands
Wrangel Island
Aleutian Islands (USA)
New Siberian Islands
Severnaya Zemlya
Novaya Zemlya
Franz Josef Land
Svalbard (Nor.)
Jan Mayen (Nor.)
Banks Island
Victoria Island Baffin Island
Ellesmere Island
Island of Newfoundland
Antarctica
Îles Crozet (France)
Tasmania
South Georgia (adm. by UK, claimed by Argentina)
Falkland Islands (Islas Malvinas) (adm. by UK, claimed by Argentina)
Kuwait
Canary Islands (Sp.)
Sao Tome & Principe
Singapore
Eq. Guinea
Faroe Is. (Den.)
Kazakhstan
Belarus
Ukraine
Moldova
Georgia
Armenia Azerbaijan
Turkmenistan
Uzbekistan
Kyrgyzstan
Yugo.
Mac.
Slov.
Cro.
Bos.
Slovak.
Eritrea
Tajikistan
Hawaiian Islands
Galapagos Islands (Ecuador)
Mauritius
Seychelles
60°
Global Sales Management:
Going Global to Achieve Growth
 QuadRep’s expanding customers wanted local
support in Singapore
 QuadRep opened office in Singapore
 Has since followed customers across the globe,
opening offices in Malaysia, China, Taiwan,
Thailand, the Philippines, and Mexico
Source: Charles Cohon, Vice President of Research of Manufacturers’ Representatives Educational
Research Foundation. He can be reached through his Web site, www.cohon.com.

1-20
South Atlantic Ocean
South Pacific Ocean
North Pacific Ocean
North Atlantic Ocean
Indian Ocean
Arctic Ocean Arctic Ocean
Arctic Ocean
North Pacific Ocean
United States of America
U.S.A.
Canada
Mexico
Brazil
U. S. A.
French Polynesia (Fr.)
Argentina
Uruguay
Paraguay
Chile
Bolivia
Peru
Ecuador
Colombia
Venezuela
French Guiana (Fr.)
Suriname
Guyana
The Bahamas
Cuba
Dominican Republic
Panama
Costa Rica
Nicaragua
Honduras
Guatemala
El Salvador
Trinidad and Tobago
Jam.
Haiti Puerto Rico (US)
Greenland (Den.)
Iceland
Madagascar
South Africa
Lesotho
Swaziland
Mozambique
Tanzania
Botswana
Namibia Zimbabwe
Angola
Zaire
Zambia
Malawi
Burundi
Kenya
Rwanda
Uganda
Congo
Gabon
Somalia
Ethiopia
Sudan
Djibouti
Belize
Egypt
Libya
Chad
Niger
Algeria
Mali
Tunisia
Nigeria
Cameroon
C. A. R.
Benin
Togo
Ghana
Burkina Faso
Barbados
Dominica
Côte D’Ivoire
Liberia
Sierra Leone
Guinea
Guinea-Bissau
Senegal
The Gambia
Mauritania
Western Sahara (Mor.)
Morocco
Finland
Norway
Sweden Estonia
Latvia
Lithuania
Poland
Romania
Bulgaria
Turkey
Greece
Czech.
Hung.
Italy
Albania
Portugal
France
Spain
Aus.
Switz.
United Kingdom
Ireland
Den.
Germany
Neth.
Bel.
Cyp.
Yemen
Oman
Saudi Arabia
U. A. E.
Qatar
Iran
Iraq
Syria
Jordan
Israel
Leb.
China
Mongolia
Russia
Afghanistan
Pakistan
India
Sri Lanka
Maldives
Nepal
Bhu.
Myanmar (Burma)
Bang.
Andaman Islands (India)
Thailand
Indonesia
Malaysia
Brunei
Philippines
Taiwan
Cambodia
Vietnam
Laos
Australia
Papua New Guinea
New Zealand
Fiji
New Caledonia
Solomon Islands
Kiribati
Marshall Islands
Federated States of Micronesia
Guam (USA)
Japan
N. Korea
S. Korea
Kuril Islands
Wrangel Island
Aleutian Islands (USA)
New Siberian Islands
Severnaya Zemlya
Novaya Zemlya
Franz Josef Land
Svalbard (Nor.)
Jan Mayen (Nor.)
Banks Island
Victoria Island Baffin Island
Ellesmere Island
Island of Newfoundland
Antarctica
Îles Crozet (France)
Tasmania
South Georgia (adm. by UK, claimed by Argentina)
Falkland Islands (Islas Malvinas) (adm. by UK, claimed by Argentina)
Kuwait
Canary Islands (Sp.)
Sao Tome & Principe
Singapore
Eq. Guinea
Faroe Is. (Den.)
Kazakhstan
Belarus
Ukraine
Moldova
Georgia
Armenia Azerbaijan
Turkmenistan
Uzbekistan
Kyrgyzstan
Yugo.
Mac.
Slov.
Cro.
Bos.
Slovak.
Eritrea
Tajikistan
Hawaiian Islands
Galapagos Islands (Ecuador)
Mauritius
Seychelles
60°
Global Sales Management:
Going Global to Achieve Growth
 Empire Technical Group’s customers moved mfg and
purchasing to Asia
 ETG and several other companies formed a
consortium and included Asian partners where
Asia/Pacific resources were required
 Became opportunity to pursue contracts to build
entire assemblies as well as just parts
 Morphed into international design and assembly
house, controlling manufacturing of complete
assemblies, turning “a $3 (part) sale to a $103 sale”
Source: Charles Cohon, Vice President of Research of Manufacturers’ Representatives Educational
Research Foundation. He can be reached through his Web site, www.cohon.com.

1-21
What Level of Investment Will Be Required, and
How Will We Allocate the Needed Resources?
 Money, human or social capital
 Human capital : refers to the people that make up an organization.
 Human capital decisions include:
 Determining number of salespeople
 What skills and experience they must have
 What training they require
 Other decisions include:
 Whether to hire telephone prospectors or to outsource
 Who handles customer service (a sales rep or a customer service rep).

What Level of Investment Will Be Required,
and How Will We Allocate the Needed
Resources?
 Social capital: refers to the ties that a firm has with others, which can
also be drawn upon as a resource.
 In other word, social capital is who owes you favor or who can be
asked a favor.
 Look at the example on page 10.
1-22

What Are the Detailed Objectives and
Action Plans?
 Remember that mission statements do not answer questions about
what to produce or markets we should serve.
 Nor they answer questions about the firm’s objectives and plans.
 These objectives and plans become more specific at the marketing
and sales strategies levels ( business unit strategies.)
1-23

1-24
Action Plans?
 SMART format for establishing objectives
Specific
Measurable
Achievable, yet challenging
Realistic
Time-based
-Milestones are important short-term objectives, can help mark a
companies progress toward achieving its objectives.
-They also can be used to also determine when the plan is off course so
that adjustments can be made.

Action Plans?
 Moreover, a good strategic plan has a detailed action plans, or
steps, that will be taken in order to accomplish those objectives.
- who will undertake each activity?
- when the activity will occur?
 At this point the firms strategy begins to involve salespeople and
sales process.
1-25

1-26
Self-Assessment Library
 Go to http://www.prenhall.com/sal/
 Access code came with your book
 Click the following
 Assessments
I. What About Me
C. Motivation Insights
5. What Are My Course Performance Goals?

1-27
Selling Approaches: grouping buyers
by how they make decisions.
Problem Solving
or Consultative
 Identify and solve a client’s problems
 Also called needs-satisfaction selling or problem/solution
selling.
 Involves asking questions in order to determine customers
needs and then presnting solutions.
Affiliative
 Based on the friendship between the salesperson and the
individual buyer. Example : if all products buyer
considering are the same, but post-sales service is
critical, then the buyer will be more inclined to purchase
from a friend who can be counted upon.
Transactional
 Finish sale as quickly and as easily as possible
 Key to success is making as many calls as possible to as
many people as possible.
 Little thought is given to the lifetime value of customers.
Enterprise
 Business-to-business (B2B) concept
 Based on not only person-to-person relationships but on
company-to-company relationships

Enterprise Selling:
1-28
•is a business-to-Business concept that reflect, at its best, a strategic
partnership between the buying and selling organization.
•It is called enterprise selling because it is based on not only person-to-
person relationship but on company-to-company relationships.
•For every customer there is salesperson; called account manager; that is
responsible on managing the relationship with a business customer.
•When engaged in enterprise selling, a salesperson will, at times, utilize
affiliative selling, transactional selling, and consultative selling all within an
enterprise-level strategy.

1-29
The Selling Approach: 8 Steps

1-30
Prospecting
 Prospecting involves identifying potential
customers for a particular product or service
 A prospect is a MAD buyer
 the Money to spend
 the Authority to buy
 the Desire to buy it

1-31
Pre-Approach
 During Pre-Approach, the salesperson tries to
learn everything he can about the account
 Can take a significant amount of time

1-32
Approach
 Approach: salesperson asks buyer to commit to
a meeting
 Opening statement must get buyer’s attention

1-33
Needs Identification
 Needs identification: salesperson confirms
prospect is MAD (Money, Authority, Desire)
 Comprised of 3 elements
Questioning
1
Identification
2
Pre-commitment
3

1-34
Presentation
 Presentation: salesperson describes product
and how it meets buyer’s needs
Feature Evidence
Benefit Agreement

1-35
Handling Objections
 Objections: reasons a buyer offers to not buy
your product
 Can occur at any time
 Salesperson should find out root
of concern and resolve it

1-36
Closing the Sale
 Close: when salesperson asks buyer for the sale
 Good close
 Reinforce decision to buy
 Confirm implementation schedule
 Thank the buyer
 Ask for referral

1-37
Implementation/Follow-Up
 Follow-Up: After delivery, ensure that the
customer has good experience with product
 Training, service, policies and procedures

1-38
Selling Process vs. Selling Approach
Selling Process
Selling Approach
Prospecting
Presenting
Closing
Transactional
Consultative
Affiliative
Enterprise

1-39
Sales Leaders

1-40
Sales Executive
Plan
 Devise sales plan to meet strategic objectives
 Develop general strategies that specify sales
approach
Organize
 Determine type of sales force
 Create hiring and training policies and strategies
Implement
 Communicate and roll out the plan
 Create the right culture
 Choose a compensation model
Monitor
 Sales and customer satisfaction
 Salesperson recruitment, selection, training
 Take corrective action as necessary

1-41
Field Sales Manager
 Plans, organizes, implements, and monitors for
specific sales team
 Salespeople report to Field Sales Manager
 Primary responsibility is sales quota
 Responsible for training and motivating
salespeople

1-42
Sales Executive vs.
Sales Manager Duties
Activity Sales Executive Sales Manager
Plan Set overall sales targets for
each product
Set quotas for each
salesperson for each product
Organize Decide what type of people to
hire for sales positions
Interview and hire specific
people for sales positions
Implement Determine the compensation
plan
Identify each person’s
motivators and find ways to
reward good performance for
each person
Monitor
Track sales by region; take
corrective action such as
additional training if sales are
too low
Observe each salesperson’s
actions in the field and offer
suggestions for their
improvement

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Ethics in Sales Management:
Maintaining NCR’s Ethical Sales Culture
We … recognize that selling
only works when everything is
right for the customer—when
we deliver value
—Rick Makos
President, NCR-Canada

1-44
Role Play: T&G Supply
 Opportunity 1: T&G Supply
 Provides maintenance, repair, and operations items to
manufacturers
 Janitorial products, hardware products to fix machines,
and other common maintenance products
 Opportunity 2: Columbia Leasing
 Car rental and leasing company
 Your job is to sell corporate contracts

1-45
Role Play (continued): Action Steps
 Break into pairs
 Each person picks 1 company to play sales mgr
 Think about issues that reflect a service-
dominant logic in each situation
 Using other concepts discussed in the chapter,
identify three characteristics that you would want
each new salesperson to have
 Take turns interviewing your partner for a sales
position

1-46
Caselet 1.1:
Killebrew Manufacturing
 Makes plastic patio products
 Widow Francine took over company
 Annual growth rate ~5% for past 20 years
 Trying to grow company
 10% introductory discount
 Makes prices same as biggest competitor
 Killebrew quality is much better
 Problem: Few new accounts are reordering
 Are salespeople too quick to sell price, not quality?

1-47
Caselet 1.1 (continued):
What Would You Do?
 Quality must be demonstrated and sold
 What sales process or approach should Francine
consider?

1-48
Caselet 1.2:
Morton’s Ice House
 Grill and microbrewery
 Owner Sherry Morton hired Trey Denton to sell
franchises
 Trey sold 12 franchises in 1 year
 Corporate goal is to sell 200 franchises in next 2
yrs
 Hired 5 salespeople for Trey to manage

1-49
Caselet 1.2 (continued):
What Would You Do?
 Problems
 Salespeople calling on same prospects
 Other prospects not being called on
 Sold only 22 franchises in 6 months
 2 salespeople quit
 10 franchises want out of contracts
 What should Sherry do?

All rights reserved. No part of this publication may be reproduced, stored in
a retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

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