Chapter 03

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Chapter 03

  1. 2. P ART II P LANNING THE S ALES T EAM’S E FFORTS
  2. 3. C HAPTER 3 B UILDING R ELATIONSHIPS THROUGH S TRATEGIC P LANNING
  3. 4. <ul><li>The importance of corporate strategy. </li></ul><ul><li>How strategic planning differs from tactical operational planning. </li></ul><ul><li>The relationship between marketing and sales force strategies. </li></ul><ul><li>The role of personal selling in the firm’s marketing relationship efforts. </li></ul>L EARNING O BJECTIVES Strategic planning helps an organization build long-term relationships with its customers. This chapter will help you better understand:
  4. 5. I MPORTANCE OF C ORPORATE P LANNING <ul><ul><li>Strategic planning involves making decisions about the organization’s long-term goals and strategies. </li></ul></ul><ul><ul><li>Strategic goals are major targets or end results that relate to the long-term survival, value, and growth of the organization. </li></ul></ul>S TRATEGIC P LANNING
  5. 6. <ul><ul><li>Strategy is a pattern of actions and resource allocations designed to achieve the goals of the organization. </li></ul></ul>S TRATEGIC P LANNING Continued
  6. 7. <ul><ul><li>Tactical planning translates broad strategic goals and plans into specific goals and plans relevant to a definite portion of the organization. </li></ul></ul><ul><ul><li>Tactic is the operational means by which an organization intends to reach its objective. </li></ul></ul><ul><ul><li>Operational planning identifies the specific procedures and processes required at lower levels of the organization. </li></ul></ul>T ACTICAL AND O PERATIONAL P LANNING
  7. 8. <ul><ul><li>Mission is the basic purpose and values of the organization, as well as its scope of operations. </li></ul></ul><ul><ul><li>Strategic vision provides a perspective on where the company is headed and what the organization can become. </li></ul></ul><ul><ul><li>Strategic plan is the company’s mission, values, objectives, strategies and tactics. </li></ul></ul>E STABLISHING A M ISSION AND V ISION
  8. 9. <ul><ul><ul><li>1. Where are we? </li></ul></ul></ul><ul><ul><ul><li>2. Where do we want to be? </li></ul></ul></ul><ul><ul><ul><li>3. How should we get there? </li></ul></ul></ul><ul><ul><ul><li>4. Can we afford it? </li></ul></ul></ul>Four key questions:
  9. 10. VISION “ Our heritage has been and our future is to be the World Leader in Imaging.” MISSION “ Build a world-class, results-oriented culture… by providing…solutions to capture, store, process, output, and communicate…images to people and machines anywhere, anytime...bringing differentiated, cost-effective solutions…to the marketplace and with flawless quality…through a diverse team of energetic employees with the world-class talent and skills necessary to sustain Kodak as the World Leader in Imaging. In this way, we will achieve our fundamental objective of Total Customer Satisfaction, and our consequent goals of Increased Global Market Share and Superior Financial Performance.” VALUES (1) Respect for the Dignity of the Individual (2) Integrity (3) Trust (4) Credibility (5) Continuous Improvement and Personal Renewal Source: Kodak’s 1999 annual report. FIGURE 3.1 KODAK’S VISION, MISSION, AND VALUES
  10. 11. FIGURE 3.2 RELATIONSHIP BETWEEN THE ORGANIZATION’S STRATEGIC PLAN AND OPERATIONAL PLANS
  11. 12. W HAT IS M ARKETING? <ul><ul><li>Production of goods or creation of services. </li></ul></ul><ul><ul><li>Marketing those goods and services. </li></ul></ul>Businesses have two major functions:
  12. 13. Marketing is defined as the process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges that satisfy individual and organizational objectives.
  13. 14. Top Management Functional Departments Salespeople Customers Manufacturers – Service – Wholesalers – Retailers – Consumers FIGURE 3.3 THE MARKETING GROUP – THE LINK BETWEEN CUSTOMERS AND THE ORGANIZATION
  14. 15. Marketing people typically have these four basic objectives to accomplish: <ul><li>Maximize sales of existing products in existing markets. </li></ul><ul><li>Develop and sell new products. </li></ul><ul><li>Develop new markets for existing or new products. </li></ul><ul><li>Provide the quality of service necessary for customers to be satisfied with their transactions and to continue doing business with the organization. </li></ul>
  15. 16. M ARKETING’S I MPORTANCE TO THE F IRM <ul><ul><li>Marketing generates sales. </li></ul></ul><ul><ul><li>Marketing provides quality service. </li></ul></ul>
  16. 17. E SSENTIALS OF A F IRM’S M ARKETING E FFORT The essentials of a firm’s marketing effort include its abilities (1) to determine the needs of its customers and (2) to create and maintain an effective marketing mix that satisfies customer needs.
  17. 18. <ul><ul><li>Product </li></ul></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Distribution or place </li></ul></ul><ul><ul><li>Promotion. </li></ul></ul>Marketing mix consists of four main elements:
  18. 19. <ul><ul><li>A good is a physical object that can be purchased. </li></ul></ul><ul><ul><li>Service is an action or activity done for others for a fee. </li></ul></ul><ul><ul><li>Product refers to both goods and services. </li></ul></ul>P RODUCT: I T’S M ORE THAN Y OU M IGHT T HINK
  19. 20. FIGURE 3.4 FOUR MARKETING-MIX ELEMENTS AND FOUR PROMOTION ACTIVITIES Product Price Place Promotion
  20. 21. FIGURE 3.5 A GOOD/SERVICE CONTINUUM
  21. 22. S ERVICES A RE P RODUCTS <ul><li>They present their own selling challenges and opportunities: </li></ul><ul><ul><li>Intangibility – customers cannot sample. </li></ul></ul><ul><ul><li>Inseparability – cannot be separated from the seller. </li></ul></ul><ul><ul><li>Heterogeneity – cannot standardize output. </li></ul></ul><ul><ul><li>Perishability and fluctuating demand – highly perishable, seasonal fluctuations. </li></ul></ul><ul><ul><li>A tough sell – most challenging sales job. </li></ul></ul>
  22. 23. FIGURE 3.4 FOUR MARKETING-MIX ELEMENTS AND FOUR PROMOTION ACTIVITIES Product Price Place Promotion
  23. 24. <ul><li>P RICE: I T’S I MPORTANT TO S UCCESS </li></ul><ul><li>Price refers to the value or worth of a product that attracts the buyer to exchange money or something of value for it. </li></ul>
  24. 25. FIGURE 3.4 FOUR MARKETING-MIX ELEMENTS AND FOUR PROMOTION ACTIVITIES Product Price Place Promotion
  25. 26. <ul><li>D ISTRIBUTION: I T H AS TO B E A VAILABLE </li></ul><ul><li>Distribution (or place) refers to the channel structure used to transfer products from an organization to its customers. </li></ul>
  26. 27. <ul><ul><li>Household – decision-making unit buying for personal use. </li></ul></ul><ul><ul><li>Firm – an organization that produces goods and services. </li></ul></ul><ul><ul><li>Government – an organization that has two functions: the provision of goods and services to households and firms and the redistribution of income and wealth. </li></ul></ul>There are three groups of customers:
  27. 28. FIGURE 3.4 FOUR MARKETING-MIX ELEMENTS AND FOUR PROMOTION ACTIVITIES Product Price Place Promotion
  28. 29. <ul><li>P ROMOTION: P EOPLE H AVE TO B E T OLD </li></ul><ul><li>Promotion, as part of the marketing mix, increases company sales by communicating product information to potential customers. </li></ul>
  29. 30. Four basic parts of a promotional effort: <ul><ul><li>Personal Selling </li></ul></ul><ul><ul><li>Advertising </li></ul></ul><ul><ul><li>Publicity </li></ul></ul><ul><ul><li>Sales Promotion </li></ul></ul>
  30. 31. TABLE 3.1 PROMOTIONAL ACTIVITIES <ul><li>Advertising. Nonpersonal communication of information paid for by an identi- fied sponsor such as an individual or an organization. Modes of advertising in- clude television, radio, direct mail, catalogs, newspapers, and outdoor advertis- ing such as billboards. </li></ul><ul><li>Publicity. Nonpersonal communication of information that is not paid for by an individual or organization. Information appears in media such as television, radio, and newspaper. </li></ul><ul><li>Sales promotion. Involves activities or materials used to create sales for goods or services. The two types of sales promotion are consumer and trade sales promotion. Consumer sales promotion includes free samples, coupons, con- tests, and demonstrations to consumers. Trade sales promotion encourages wholesalers and retailers to purchase and to sell aggressively using devices such as sales contests, displays, special purchase prices, and free merchandise. </li></ul><ul><li>Personal selling. Personal communication of information to persuade a prospective customer to buy something – a good, service, idea, or whatever – that satisfies an individual’s needs. </li></ul>
  31. 32. FIGURE 3.6 TYPICAL DISTRIBUTION CHANNELS FOR CONSUMER AND INDUSTRIAL PRODUCTS
  32. 33.   TABLE 3.2 EXAMPLES OF EACH MARKETING-MIX ELEMENT       Warranties Trade shows     Sizes Sales management     Services Publicity Wholesalers   Returns Product displays Transportation   Quality level Personal selling Retailers Promotional allowances Packaging Free samples Locations List price Image Coupons Inventory Discounts Features Advertising Channels Credit term Brand name P ROMOTION P LACE P RICE P RODUCT
  33. 34. T HE G OAL OF A M ARKETING M IX The organization’s marketing group strives to create a marketing mix for the right product, at the right price, at the right time, and with the right promotional effort.
  34. 35. R ELATIONSHIP M ARKETING Relationship marketing is the creation of customer loyalty.
  35. 36. <ul><ul><li>Transaction selling: Customers are sold to and not contacted again. </li></ul></ul><ul><ul><li>Relationship selling: The seller contacts customers after the purchase to determine if they are satisfied and have future needs. </li></ul></ul><ul><ul><li>Partnering: The seller works continually to improve its customers’ operations, sales, and profits. </li></ul></ul>L EVELS OF R ELATIONSHIP M ARKETING
  36. 37. T ECHNOLOGY B UILDS R ELATIONSHIPS AND P ARTNERS <ul><ul><li>Most dramatic force shaping an organization’s marketing efforts today. </li></ul></ul><ul><ul><li>Helps salespeople increase the speed with which they can find leads, gather information, reduce paperwork, and provide service. </li></ul></ul><ul><ul><li>Technology is expensive. </li></ul></ul>
  37. 38. R ELATIONSHIP M ARKETING AND THE S ALES F ORCE <ul><li>These four basic questions are guidelines that define the role of the sales force: </li></ul><ul><ul><li>1. How much selling effort is necessary to gain and hold customers? </li></ul></ul><ul><ul><li>2. Is the sales force the best marketing tool, compared to advertising and other sales promotion methods, in terms of cost and results? </li></ul></ul><ul><ul><li>3. What type of sales activities – for example, technical assistance and frequent or infrequent sales calls – will be necessary? </li></ul></ul><ul><ul><li>4. Can the firm gain strength relative to its competition with its sales force? </li></ul></ul>
  38. 39. <ul><ul><li>Salespeople generate revenue. </li></ul></ul><ul><ul><li>Salespeople provide service. </li></ul></ul><ul><ul><ul><li>Service quality is a subjective assessment that customers arrive at by evaluating the service level that they perceive being delivered. </li></ul></ul></ul><ul><ul><li>Salespeople implement relationship marketing. </li></ul></ul>P ERSONAL S ELLING B UILDS R ELATIONSHIPS
  39. 40. S TRATEGIC P LANNING AND THE S ALES M ANAGEMENT P ROCESS P LANNING A S ALES S TRATEGY T HE D EVELOPMENT OF S ALES S TRATEGIES <ul><ul><li>A clear picture of the present situation. </li></ul></ul><ul><ul><li>Well-defined strategies covering every major aspect of the selling units or departments. </li></ul></ul><ul><ul><li>Income and expense budgets and profit plan. </li></ul></ul>
  40. 41. A sales strategic plan includes the following four major questions: <ul><ul><li>What is the sales department’s present condition? </li></ul></ul><ul><ul><li>What trends are apparent? </li></ul></ul><ul><ul><li>What are the most important objectives? </li></ul></ul><ul><ul><li>What are the strategies for getting these objectives accomplished? </li></ul></ul>
  41. 42. S ETTING N EXT Y EAR’S S ALES P LAN The sales force may have objectives measured on the basis of the following: <ul><ul><li>Contribution to profits. </li></ul></ul><ul><ul><li>Return on assets (ROA) managed by the sales force. </li></ul></ul><ul><ul><li>Sales/cost ratio. </li></ul></ul><ul><ul><li>Market share. </li></ul></ul>
  42. 43. S ALES O BJECTIVES D IRECT O THER A CTIVITIES
  43. 44. FIGURE 3.8 THE STRATEGIC SALES FORCE PLANNING PROCESS
  44. 45. T HE B OTTOM L INE Strategic planning involves making decisions about an organization’s long-term goals and strategies. Most people today associate marketing with selling. This marketing concept evolved over the years, developing as American businesses matured. The marketing mix consists of four variables: product, price, distribution, and promotion. Firms must carefully consider the role of the sales force in their promotional program or promotional aspect of the marketing mix.

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