M04p - Organizational Strategies and The Sales Function

14
Module 4
Organizational Strategies and

the Sales Function
Copyright 2000 by Harcourt, Inc. All rights reserved. (1)
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Organizational Strategy Levels

(Exhibit 4.1)
Strategy Level
Key Decision Areas
Key Decision Makers
Corporate Strategy
Corporate Mission
SBU Definition
SBU Objectives
Corporate Growth Orientation
Corporate Management
Business Strategy
Strategy Types
Strategy Execution
SBU Management
Marketing Strategy
Target Market Selection

Marketing Mix Development
Integrated Mkt Communications
Marketing Management
Sales Strategy
Account Targeting Strategy

Relationship Strategy
Sales Channel Strategy
Sales Management
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Definition of
Strategic Business Units
(SBUs)
A single product or brand, a line of products, or a
mix of related products that meets a common
market need or a group of related needs, and the
unit's management is responsible for all (or most)
of the basic business functions (Cravens 1991).
Too few SBUs makes it difficult to support each
product or line of products.
Too many SBUs creates expensive duplication
within the corporation.
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LOW
MARKET GROWTH
HIGH
Growth-Share Matrix for SBU Objectives

Build or Hold
Market Share
Objective
Build or
Divest/Liquidate
Market Share
Objective
Hold
Market Share
Objective
Divest/Liquidate
Market Share
Objective
HIGH
LOW
MARKET SHARE
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SBU Objectives and the Sales Organization

(Exhibit 4.2)
Market Share
Objectives
Sales Organization
Objectives
Primary Sales Tasks
Recommended
Compensation System
Build
Build sales volume

Secure distribution
Call on prospective and

new accounts
Provide high service levels
particularly pre-sale service
Product/market feedback
Salary plus incentive
Hold
Maintain sales volume

Consolidate market
position through
concentration on targeted
segments
Secure additional outlets
Call on targeted current

accounts
Increase service levels to
current accounts
Salary plus commission or

bonus
Harvest
Reduce selling costs

Target profitable accounts
Call on and service most

profitable accounts only and
eliminate unprofitable
accounts
Reduce service levels
Reduce inventories
Salary plus bonus
Divest/Liquidate
Minimize selling costs and

clear out inventory
Dump inventory
Eliminate service
Salary
Corporate Growth Orientation and Sales Management Activities

(Compaq Computer Example)
Corporate Growth Direction
Acquisition
Internal Development
Intensive Growth
Corporate Growth Method
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Diversification Growth
Development of new Internet

Development of new personal
products, small business
computers for existing markets
systems, and engineering
workstations
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
Niche - could go either low cost or differentiation
approach
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Marketing Strategy and

the Sales Function
Show TM41
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Advantages and Disadvantages

of Personal Selling
Advantages
Only promotional tool that consists of personal
communication between seller and buyer
More credible and has more impact
Better timing of message delivery
Ability to tailor message to buyer
Allows for sale to be closed
Disadvantage
COST
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Personal Selling-Driven vs.

Advertising-Driven
Marketing Communications Strategies
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
Advertising
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Target Market Situations and

Personal Selling
Target Market: A definition of the specific
market segment to be served
Personal Selling-Driven Promotional Strategies
are appropriate when:
The market consists of only a few buyers that tend to be
concentrated in location
The buyer needs a great deal of information
The purchase is important
The product is complex
Service after the sale is important
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The Sales Strategy Framework

(Figure 4.4)
Buying Situation
Account
Targeting
Strategy
Buying Center
Relationship
Strategy
Organizational
Buyer Behavior
Account
Salesperson
Sales
Strategy
Buying Process
Sales Channel
Strategy
Buying Needs
Selling
Strategy
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Organizational Buyer Behavior

Types of Organizations
(Exhibit 4.6)
Major Category
Business
or
Industrial Organizations
Types
Users - purchase products and services to
produce other products and services
Original Equipment Manufacturers (OEM)
purchase products to incorporate into
products
Resellers - purchase products to sell
Government Organizations
Institutions
Federal, State, and Local Government

Agencies
Public and Private Institutions
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Buying Situation
Straight Rebuy Buying Situation
Routinized Response Behavior
Modified Rebuy Buying Situation

Limited Problem Solving
New Task Buying Situation

Extensive Problem Solving
14

Buying Center
Initiators
Users
Gatekeepers
Influencers
Deciders
Purchasers
14

Buying Process
Phase 8. Performance Feedback/Evaluation
Phase 7. Selection of Order Routine
Phase 6. Evaluate Proposals/Select Suppliers
Phase 5. Acquire and Analyze Proposals
Phase 4. Identify and Qualify Potential Sources
Phase 3. Specify Item Specs/Quantity Needed
Phase 2. Determine Item Specs/Quantity Needed
Phase 1. Recognize Problem/Need
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Organizational Buying
Behavior
(Exhibit 4.7)
Buying Needs
Personal Goals
Organizational Goals
Want a Feeling of Power
Control Cost in Product Use Situation
Seek Personal Pleasure
Few Breakdowns of Product
Desire Job Security
Dependable Delivery for Repeat Purchases
Want to be Well Liked
Adequate Supply of Products
Want Respect
Cost within Budget Limits
Organizational buying is goal directed.

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Sales Strategy
Account-Targeting Strategy
The classification of accounts
within a target market into
categories for the purpose of
developing strategic approaches
for selling to each account or
account group.
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Sales Strategy
Relationship Strategy
A determination of the type of
relationship to be developed with
different account groups.
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Characteristics of
Relationship Strategies
(Exhibit 4.8)
Transaction
Relationship
Goal
Time Frame
Offering
Number of
Customers
Sell Products
Short
Standardized
Many
Solutions
Relationship
Partnership
Relationship
Collaborative
Relationship
Add Value
Long
Customized
Few
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Sales Strategy
Selling Strategy
The planned selling approach for
each relationship strategy.
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Matching Selling and

Relationship Strategies
(Exhibit 4.9)
Transaction
Stimulus-Response
Mental States
Solutions
Need Satisfaction
Problem-Solving
Partnership
Consultative
Collaborative
Consultative
Customized
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Sales Strategy
Ensuring that accounts receive selling
effort coverage in an effective and
efficient manner.
14

The Internet
Sell or provide information to assist
selling online.
14

Industrial Distributors
Employ their own salesforce
May represent one manufacturer, several
non-competing manufacturers or several
competing manufacturers
14

Independent Representatives
(Manufacturers Reps or Reps)
Sell complimentary products from noncompeting manufacturers
14

Team Selling
Three Selling Situations
New Task Selling
Modified Resell
Routine Resell
Two Types of Team Selling

Multilevel Selling
Major Account Selling
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Team Selling and Buying Centers

(Figure 4.7)
Selling Firm
Sales Team
Marketing
Sales
Manufacturing
R&D
Engineering
Physical
Distribution
Buying Firm
Salesperson
Exchange
Processes
Purchasing
Agent
Organizational
Buying Center
Purchasing
Information
Problem Solving
Negotiation
Friendship
Trust
Product/Services
Payment
Reciprocity
Manufacturing
R&D
Engineering
Marketing
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Uses of Telemarketing
(Figure 4.8)
Telemarketing
Integrate with
Field Sales Force
Selling to Same
Accounts
Replace Field
Sales Force for
Certain Accounts
Activities
Prospecting
Qualifying Leads
Conducting Surveys
Taking Orders
Checking on Order
Status
Handling Order
Problems
Following Up for
Repeat Business
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Trade Shows
Typically industry-sponsored events
where companies utilize a booth to
display product and services to potential
and existing customers.

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14

Organizational Strategies and

Copyright 2000 by Harcourt, Inc. All rights reserved. (1)

Organizational Strategy Levels

Key Decision Areas

Key Decision Makers

Target Market Selection

Account Targeting Strategy

Copyright 2000 by Harcourt, Inc. All rights reserved. (2)

Growth-Share Matrix for SBU Objectives

Copyright 2000 by Harcourt, Inc. All rights reserved. (4)

SBU Objectives and the Sales Organization

Primary Sales Tasks

Build sales volume

Call on prospective and

Salary plus incentive

Maintain sales volume

Call on targeted current

Salary plus commission or

Reduce selling costs

Call on and service most

Salary plus bonus

Minimize selling costs and

Corporate Growth Orientation and Sales Management Activities

Corporate Growth Method

Development of new Internet

Investing in companies with Operating as a venture capitalist

Copyright 2000 by Harcourt, Inc. All rights reserved. (6)

Business Strategy and the Sales Function

Business Strategy Types

Marketing Strategy and

Copyright 2000 by Harcourt, Inc. All rights reserved. (8)

Advantages and Disadvantages

Personal Selling-Driven vs.

When Low Cost per Contact is Important

Copyright 2000 by Harcourt, Inc. All rights reserved. (10)

Target Market Situations and

The Sales Strategy Framework

Organizational Buyer Behavior

Federal, State, and Local Government

Organizational Buyer Behavior

Modified Rebuy Buying Situation

New Task Buying Situation

Copyright 2000 by Harcourt, Inc. All rights reserved. (14)

Organizational Buyer Behavior

Copyright 2000 by Harcourt, Inc. All rights reserved. (15)

Organizational Buyer Behavior

Want a Feeling of Power

Control Cost in Product Use Situation

Seek Personal Pleasure

Few Breakdowns of Product

Desire Job Security

Dependable Delivery for Repeat Purchases

Want to be Well Liked

Adequate Supply of Products

Cost within Budget Limits

Organizational buying is goal directed.

Copyright 2000 by Harcourt, Inc. All rights reserved. (18)

Copyright 2000 by Harcourt, Inc. All rights reserved. (19)

Copyright 2000 by Harcourt, Inc. All rights reserved. (20)

Copyright 2000 by Harcourt, Inc. All rights reserved. (21)

Matching Selling and

Copyright 2000 by Harcourt, Inc. All rights reserved. (22)