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Part One:

Strategic Planning

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Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Sales Management: Shaping Future Sales Leaders

Introduction to
Sales Management
Chapter 1

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Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
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

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Managing Sales Force Is Important
 Sales positions are hardest to fill
 Sales consumes >20% of a firm’s revenue

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$$$
 Sales starting salaries are ~20% higher than
other marketing positions
 Many CEOs get their start in sales
 Sales managers earn more than managers in
other areas
 Sales jobs predicted to grow at a faster rate than
other professions

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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.”

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Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
What Being a Sales Manager Means

Coaching  Coaching salespeople so they can improve

 Developing strategies and delegating the


Developing responsibility for implementation to others

 Figuring out how to motivate people, some who


Motivating are older than you

 Convincing others that what is right for the sales


Convincing force is right for their departments, too

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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

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Sample Mission Statements
 Everything we do is inspired by our
enduring mission:
 Coca-Cola  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
 Southwest Customer Service delivered with a sense of
Airlines warmth, friendliness, individual pride, and
Company Spirit

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Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
The Strategy Hierarchy
 Corporate strategy encompasses plans and
goals for the entire organization
 Address questions 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

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Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
The Strategy Hierarchy

Corporate
Strategy

Marketing Strategy

Sales Strategy

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Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Creating a Marketing Strategy

Markets  What markets do we serve with what products?

 What types of relationships do we form and with


Relationships whom?

 What level of investment will be required, and


Investment how will we locate and allocate the needed
resources?

 What are the detailed objectives and action


Objectives plans?

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What Markets Do We Serve with
What Products?
 Find a sustainable
competitive advantage
 Need expertise,
technology or a patent

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Product-Market Grid

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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
 A service advantage is often a function of the quality of
relationships
 Customers’ lifetime value is worth more than the average
single purchase

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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
 Customer retention strategy: plan designed to
keep customers
 Growth strategy: plan designed to increase
sales to the same customers

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Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Global Sales Management:
Going Global to Achieve Growth
 QuadRep’s expanding customers wanted local
Ellesmere Island Severnaya Zemlya
Arctic Ocean Arctic Ocean Franz Josef Land
Arctic Ocean
New Siberian Islands
Greenland (Den.) Svalbard (Nor.)
Banks Island Jan Mayen (Nor.) Novaya Zemlya Wrangel Island
Victoria Island Baffin Island

support in Singapore
U.S.A.

Canada
Iceland
Faroe Is. (Den.) Norway

Ireland
United Kingdom
Den.
Neth.
Sweden

Poland
Finland
Estonia
Latvia
Lithuania
Belarus
Russia 60°
Aleutian Islands (USA)

Bel. Germany
Island of Newfoundland Czech. Ukraine Kuril Islands
Slovak.
Aus. Hung. Kazakhstan

 QuadRep opened office in Singapore


Moldova Mongolia
France Switz. Slov.
Cro. Yugo.Romania
Bos. Georgia Uzbekistan
Bulgaria
North Atlantic Ocean Italy Mac.
Albania Armenia Azerbaijan
Kyrgyzstan
United States of America Portugal
Spain
Greece Turkey Turkmenistan Tajikistan
N. Korea

S. Korea Japan
North Pacific Ocean Tunisia Cyp. Leb. Syria Afghanistan North Pacific Ocean
Morocco Israel Iraq Iran China
Canary Islands (Sp.) Jordan
Kuwait Pakistan Nepal
Algeria Libya Bhu.
Egypt

 Has since followed customers across the globe,


The Bahamas Qatar
Western Sahara (Mor.)
Mexico Cuba Bang. Taiwan
Hawaiian Islands Saudi U. A. E.
Arabia Myanmar (Burma)
Dominican Republic India
Oman Laos
U. S. A. Jam.
Mauritania Mali
Belize Haiti Puerto Rico (US) Dominica
Niger Eritrea
Honduras Senegal Sudan Yemen Thailand Philippines
Guatemala Chad Vietnam
The Gambia Burkina Faso
El Salvador Nicaragua Barbados Cambodia
Andaman Islands (India)

opening offices in Malaysia, China, Taiwan,


Guinea-Bissau Guinea Benin Djibouti
Trinidad and Tobago Marshall Islands
Costa Rica Côte D’Ivoire Nigeria Sri Lanka Federated States of Micronesia
Venezuela Guyana Sierra Leone Ethiopia
Panama Suriname C. A. R. Maldives Brunei Guam (USA)
French Guiana (Fr.) Liberia Cameroon
Ghana Togo Somalia Malaysia
Colombia Eq. Guinea Uganda
Singapore
Gabon Rwanda Kenya Kiribati
Ecuador

Thailand, the Philippines, and Mexico


Galapagos Islands (Ecuador) Sao Tome & Principe Indonesia
Zaire Burundi Papua New Guinea
Solomon Islands
Congo Tanzania Seychelles
Malawi
Peru
Brazil Angola
Zambia Mozambique
Bolivia Madagascar
Namibia Zimbabwe Fiji
French Polynesia (Fr.) New Caledonia
Botswana
Paraguay Mauritius Indian Ocean
Swaziland
Australia
South Africa
Lesotho
Uruguay
South Pacific Ocean Chile Argentina South Atlantic Ocean New Zealand

Tasmania
Falkland Islands (Islas Malvinas) (adm. by UK, claimed by Argentina)

Îles Crozet (France)

South Georgia (adm. by UK, claimed by Argentina)

Source: Charles Cohon, Vice President of Research


Antarctica
of Manufacturers’ Representatives Educational
Research Foundation. He can be reached through his Web site, www.cohon.com.
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Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Global Sales Management:
Going Global to Achieve Growth
 Empire Technical Group’s customers moved mfg and
Ellesmere Island Severnaya Zemlya
Arctic Ocean Arctic Ocean Franz Josef Land
Arctic Ocean
New Siberian Islands
Greenland (Den.) Svalbard (Nor.)
Banks Island Jan Mayen (Nor.) Novaya Zemlya Wrangel Island
Victoria Island Baffin Island

purchasing to AsiaU.S.A.

Canada
Iceland
Faroe Is. (Den.) Norway

United Kingdom
Den.
Sweden
Finland
Estonia
Latvia
Lithuania
Russia 60°
Aleutian Islands (USA)
Ireland Neth. Belarus
Germany Poland
Bel.

 ETG and several other companies formed a


Island of Newfoundland Czech. Ukraine Kuril Islands
Slovak.
Aus. Hung. Moldova Kazakhstan
France Switz. Slov. Mongolia
Cro. Yugo.Romania
Bos. Georgia Uzbekistan
Bulgaria
North Atlantic Ocean Italy Mac.
Albania Armenia Azerbaijan
Kyrgyzstan
United States of America Portugal
Spain
Greece Turkey Turkmenistan Tajikistan
N. Korea

S. Korea Japan
North Pacific Ocean

consortium and included Asian partners where


Tunisia Cyp. Leb. Syria
Iraq
Afghanistan
China North Pacific Ocean
Morocco Israel Iran
Canary Islands (Sp.) Jordan
Kuwait Pakistan Nepal
Algeria Libya Bhu.
The Bahamas Egypt
Western Sahara (Mor.) Qatar
Mexico Cuba Bang. Taiwan

Asia/Pacific resources were required


Hawaiian Islands Saudi U. A. E.
Arabia Myanmar (Burma)
Dominican Republic India
Oman Laos
U. S. A. Jam.
Mauritania Mali
Belize Haiti Puerto Rico (US) Dominica
Niger Eritrea
Honduras Senegal Sudan Yemen Thailand Philippines
Guatemala Chad Vietnam
The Gambia Burkina Faso
El Salvador Nicaragua Barbados Cambodia
Guinea-Bissau Guinea Benin Djibouti Andaman Islands (India)
Trinidad and Tobago Marshall Islands
Costa Rica Côte D’Ivoire Nigeria Sri Lanka Federated States of Micronesia
Venezuela Guyana Sierra Leone Ethiopia
Panama Suriname C. A. R. Brunei Guam (USA)

 Became opportunity to pursue contracts to build


Maldives
French Guiana (Fr.) Liberia Cameroon
Ghana Togo Somalia Malaysia
Colombia Eq. Guinea Uganda
Singapore
Gabon Rwanda Kenya Kiribati
Galapagos Islands (Ecuador) Ecuador Sao Tome & Principe Indonesia
Zaire Burundi Papua New Guinea
Solomon Islands
Congo Tanzania Seychelles

entire assemblies as well as just parts


Malawi
Peru
Brazil Angola
Zambia Mozambique
Bolivia Madagascar
Namibia Zimbabwe Fiji
French Polynesia (Fr.) New Caledonia
Botswana
Paraguay Mauritius Indian Ocean
Australia

 Morphed into international design and assembly


Swaziland
South Africa
Lesotho
Uruguay
South Pacific Ocean Chile Argentina South Atlantic Ocean New Zealand

house, controlling manufacturing of complete Falkland Islands (Islas Malvinas) (adm. by UK, claimed by Argentina)

Îles Crozet (France)


Tasmania

assemblies, turning “a $3 (part) sale to a $103 sale”


South Georgia (adm. by UK, claimed by Argentina)

Source: Charles Cohon, Vice President of Research


Antarctica
of Manufacturers’ Representatives Educational
Research Foundation. He can be reached through his Web site, www.cohon.com.
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What Level of Investment Will Be Required, and
How Will We Allocate the Needed Resources?

 Money, human or social capital


 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)

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What Are the Detailed Objectives and
Action Plans?
 SMART format for establishing objectives

S pecific
Measurable
A chievable, yet challenging
R ealistic
T ime-based

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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?

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Selling Approaches
 Finish sale as quickly and as easily as possible
Transactional  Key to success is making as many calls as
possible to as many people as possible

 Based on the friendship between the salesperson


Affiliative and the individual buyer

 Identify and solve a client’s problems


Problem Solving
 Also called needs-satisfaction selling or
or Consultative problem/solution selling

 Business-to-business (B2B) concept


Enterprise  Based on not only person-to-person relationships
but on company-to-company relationships

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The Selling Approach: 8 Steps

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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

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

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

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Needs Identification
 Needs identification: salesperson confirms
prospect is MAD (Money, Authority, Desire)
 Comprised of 3 elements

1
Questioning
2
Identification
3
Pre-commitment

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Presentation
 Presentation: salesperson describes product
and how it meets buyer’s needs

Feature Evidence

Benefit Agreement

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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

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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

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

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Selling Process vs. Selling Approach
Selling Approach Selling Process

Transactional Prospecting

Affiliative

Consultative
Closing Presenting

Enterprise

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Sales Leaders

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Sales Executive

 Devise sales plan to meet strategic objectives


Plan  Develop general strategies that specify sales
approach

 Determine type of sales force


Organize  Create hiring and training policies and strategies

 Communicate and roll out the plan


Implement  Create the right culture
 Choose a compensation model
 Sales and customer satisfaction
Monitor  Salesperson recruitment, selection, training
 Take corrective action as necessary

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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

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Sales Executive vs.
Sales Manager Duties
Activity Sales Executive Sales Manager
Set overall sales targets for Set quotas for each
Plan each product salesperson for each product

Decide what type of people to Interview and hire specific


Organize hire for sales positions people for sales positions

Identify each person’s


Determine the compensation motivators and find ways to
Implement plan reward good performance for
each person

Track sales by region; take Observe each salesperson’s


corrective action such as actions in the field and offer
Monitor additional training if sales are suggestions for their
too low 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

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