Sales Management Planning

Chapter 8

Organizational Strategy Levels

Strategy Level
Corporate Strategy

Key Decision Areas

Corporate Mission SBU Definition SBU Objectives Corporate Growth Orientation Strategy Types Strategy Execution

Key Decision Makers

Corporate Management

Business Strategy

SBU Management

Marketing Strategy

Target Market Selection Marketing Mix Development Integrated Mkt Communications Account Targeting Strategy Relationship Strategy Sales Channel Strategy

Marketing Management

Sales Strategy

Sales Management

SBU Objectives and the Sales Organization

Market Share Objectives Build Sales Organization Objectives
Build sales volume

Primary Sales Tasks

Call on prospective

Recommended Compensation System

Salary plus incentive

Secure distribution

Hold

Maintain sales

volume Consolidate market position Harvest

Reduce selling

costs Target profitable accounts

and new accounts Product/market feedback Call on targeted current accounts Increase service levels to current accounts Call on and service most profitable accounts only and eliminate unprofitable accounts Reduce inventories
Dump inventory Eliminate service

Salary plus commission or bonus

Salary plus bonus

Divest/Liquidate

Minimize selling

Salary
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costs and clear out inventory

Developing Growth Strategies

Product/ Market Expansion Grid
Existing Products Existing Markets New Markets New Products

1. Market Penetration 2. Market Development

3. Product Development 4. Diversification

Product/ Market Expansion Grid

Market Penetration: making more sales to current customers without changing its products

Add new stores in current market areas, improve advertising, prices, service or store design.

Market Development: develop new markets for its current products

Identify new demographic or geographic markets.

Product Development: offering modified or new products to current markets

New styles, flavors, colors, or modified products.

Start up or buy new businesses.
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Diversification: new products for new markets

Corporate Growth Orientation and Sales Management Activities (Compaq Computer Example)
Corporate Growth Direction
Intensive Growth Internal Development Diversification Growth

Corporate Growth Method

Development of new Internet Development of new personal products, small business computers for existing markets systems, and engineering workstations

Acquisition

Investing in companies with Operating as a venture capitalist products to help existing and investing in companies businesses compete more with promising new products successfully and technologies
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Business Strategy and the Sales Function

Business Strategy Types
Porters Generic Business Strategies

Low Cost - focus on low cost Differentiation - focus on uniqueness Niche - focus on a particular target market and use a low cost or differentiation approach

Role of the Salesforce

Low Cost - sell to large customers; minimize costs; focus on price; order taking role Differentiation - sell non-price benefits; high customer service and responsiveness; target low price sensitive customers; order generator 7 Niche - low cost or differentiation approach

Personal Selling-Driven vs. Advertising-Driven

Personal Selling When Message Flexibility is Important When Message Timing is Important When Reaction Speed is Important When Message Credibility is Important When Trying to Close the Sale

When Low Cost per Contact is Important When Repetitive Contact is Important When Control of Message is Important When Audience is Large
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Advertising

What is Sales Management Planning?

It involves setting objectives and determining ways to achieve them. b) Sales planning is anticipating environmental developments and preparing to meet to capitalize on them. c) Sales planning is very crucial when introducing new products. Close cooperation between sales and production management is crucial to the successful launching of innovative products. d) Strategic plan outlines how resources will be allocated to market opportunities.
a)

Planning Hierarchy
Corporate mission Strategic business plan (long-term plan for the overall resource allocation to market, which includes marketing, finance, HR, operations, production).

Strategic marketing plan (long term plan for specific products and markets).
Strategic sales plan (long range plan for sales activities). Tactical Sales Plans (short run plan for implementing sales strategy).
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Information for Sales Planning

Primary Data new data gathered specifically for the project in hand

Secondary Data available data also gathered for some other purpose Other sources of information (e.g. MIS, MKIS, DSS)
Sales Intelligence
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Sales Intelligence
Sales people are expected to provide information for sales

planning and management and there is growing need for better sales intelligence from the field.
Sales people possess vital information about the market that

can be used to develop sales forecasts and quotas, to assess new products, and to formulate marketing strategies.
Salespeople should be encouraged/motivated by the

management; they should be provided with incentives, training, and proper supervision to encourage them to provide relevant information.
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Contd..
Sales managers must also make sure that the marketing

intelligence process is a two-way communication. Once the data has been analyzed, it is essential that relevant facts are communicated back to the field force in order to improve their selling efficiency.
Although the sales person has thorough knowledge about the

market, his opinion may be biased or incomplete knowledge.

For this reason sales manager must work with other staff

specialists to develop a procedure for incorporating information from the field into the marketing planning process. For such reasons other sources are also used, like:
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1. 2.

3. 4.

5.

Secondary data (which provides insight about the market conditions and competitors) Internal sales data (which allows managers to trace the histories of individual accounts, products, territories, and seasons) Product life cycle patterns Fluctuations, growth and decline of specific customers or customer groups (This information can be used to detect changes into different areas and at different times throughout the year) marketing research team
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Sales Management Planning Process

1. 2. 3.

4.

5.

6.

Analysis examines what happens in the past, look at the present situation, SWOT analysis, trend analysis. Goal setting phase set the direction for the sales force Sales strategies translate the goals into action Tactical plans more specific action plans, specific detailed outlines, assignment of responsibilities /deadlines Implementation stage plan is executed here Control stage serves to compare actual outcomes with planned results, in order to examine any plan revisions for the future.
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