Transcript Chapter 1

Chapter 1
Introduction to Sales
Management
and Its Evolving Roles
PowerPoint presentation prepared by
Dr. Rajiv Mehta
New Jersey Institute of Technology
Chapter Outline
• What Is Sales
Management?
• Types, Titles, and
Hierarchical Levels of
Sales Managers
• Responsibilities and
Duties of Sales Managers
• Expanding Roles of Sales
Managers
• What Qualities Are
Needed to Be a Sales
Manager?
Source: Flying Colours Ltd.
Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved.
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Chapter Outline
• Integrating Sales
Management and
Marketing Management
• Monitoring and Adapting
to the Macroenvironment
• How Well Are Sales
Managers Performing?
• Developing Sales
Managers for the New
Millennium
Source: Flying Colours Ltd.
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Learning Objectives
After reading this chapter, you should be
able to do the following:
1. Summarize the basic responsibilities and evolving roles of
sales management.
2. Demonstrate how sales managers can better integrate
their roles with marketing management.
3. Identify and prepare for megatrends that will affect your
future in sales management.
4. Evaluate the selection criteria for sales management and
compare them to your present and potential qualifications.
5. Analyze how the sales manager’s job is expanding and
what it will mean for your career.
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What Is Sales Management?
• Few jobs are more crucial to the ultimate
success of a business than sales management.
• Sales management shapes and determines
nearly all the firm’s interactions with customers.
• Sales managers oversee the sales force—the
direct income producers who determine the
financial health of their organizations.
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Types, Titles, and Hierarchical
Levels of Sales Managers
V.P.
sales
National
sales manager
Zone, division, or
regional sales manager
District, branch, or
field sales manager
Sales supervisor
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Hiring Sales Managers/Leaders
• To see a video on hiring sales
managers/leaders, go to
– http://www.sellingpower.com/video/index.asp?date=1
1/8/2006
• To read the “Top Tips for the Newly Appointed
Sales Manager,” go to
– http://www.cmctraining.org/articles_view.asp?sid=0&
article_id=25
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Responsibilities and Duties
of Sales Managers
• Sales managers plan, lead, and control the selling
activities of their organizations.
• They continuously monitor and adjust their marketing
strategies to dynamic technological, competitive,
economic, legal, and cultural factors.
• Sales managers also consider the interests of the
company's stakeholders, such as these:
–
–
–
–
–
–
–
employees
suppliers
financial community
media
stockholders
special interest groups
governments
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Figure 1.1: Responsibilities and Duties of
Sales Managers: A Conceptual Framework
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Twenty-First Century
Sales Force Management
• Chapters 1–4 will help you understand the
following:
– Introduction to Sales Management and Its Evolving
Roles (chapter 1)
– Managing Ethics in a Sales Environment (chapter 2)
– Customer Relationship Management and Building
Partnerships (chapter 3)
– The Selling Process (chapter 4)
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The Definition of Selling
• To see a video on the definition of selling and
the role of the sales manager in managing the
sales management function, go to
– http://www.sellingpower.com/video/index.asp?date=1
2/15/2006
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Sales Forecasting and Budgeting
• Sales Forecasting and
Budgeting (chapter 5) shows how
sales managers accomplish the
following:
– estimate market potential for their
industry
– estimate sales potential for their
company
– develop a final sales forecast
• Sales managers employ these skills:
– quantitative sales forecasting
approaches
– qualitative sales forecasting
approaches
• A sales budget is a financial plan of
expenditures needed to accomplish the
organization’s goals and objectives.
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Sales Force Planning and Organizing
• Sales Force Planning and
Organizing (chapter 6) provides
guidelines and direction for most other
sales decisions and activities.
• Sales managers need to do the
following:
–
–
–
–
set sales goals and objectives
establish sales policies and procedures
devise sales force strategies and tactics
implement controls
Source: Flying Colours Ltd.
• Sales managers must determine
these things:
– the optimal number of salespeople to hire
– the best way to structure the sales force
(geographically, by product, by customer
type, or by some combination of these
factors)
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Time and Territory Management
• Time and Territory
Management (chapter 7)
helps sales managers
determine which accounts
their salespeople should call
on, when, and how often.
• Sales managers must do
the following:
– design sales territories
– decide individual sales quotas
– design a formal routing pattern
for salespeople to follow in
calling on customers
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Recruiting and
Selecting the Sales Force
• Recruiting and Selecting the
Sales Force (chapter 8) deals
with sales managers taking these
actions:
– identifying sources of potential
sales recruits
– devising a system for
measuring candidates against
predetermined job
requirements using numerous
tools and techniques
– deciding whether to select or
reject each applicant
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Source: Stockbyte
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Training the Sales Force
• Training the Sales
Force (chapter 9) deals
with designing programs
to train salespeople.
• Sales managers must
answer several questions:
– Who should receive the
training?
– Who should do the training?
– Where, when, and how
should the training be
accomplished?
– What should be taught?
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Source: Stockbyte
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Sales Force Leadership
• Sales Force Leadership
(chapter 10) is the
emotional process of
exercising psychological,
social, and inspirational
influence on individual
salespeople and the sales
force collectively toward the Source: Flying Colours Ltd.
achievement of organizational
objectives, goals, and values.
• Several different theories,
concepts, and approaches to
effective sales force
leadership are explored.
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Sales Force Motivation
• Sales Force
Motivation (chapter 11) deals with
the set of dynamic interpersonal
processes that stimulate the initiation,
direction, intensity, and persistence of
work-related behaviors of salespeople
toward attaining organizational goals and
objectives.
• Three types of theories that can be used
to motivate the sales force:
– content theories of motivation
– process theories of motivation
– reinforcement oriented theories of
motivation
Source: Triangle Images
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Sales Force Compensation
• Sales Force Compensation
(chapter 12) deals with all
monetary payments and benefits
used to remunerate and influence
the performance of salespeople.
• Most companies use three main
methods:
– straight salary—a fixed amount of
Source: PhotoLink
money at fixed intervals, such as
weekly or monthly
– straight commission—an amount
that varies with results, usually sales
or profits
– combination—a mix of salary and
commission
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Sales Volume, Costs,
and Profitability Analysis
• Sales Volume, Costs, and
Profitability Analysis
(chapter 13) is essential to
assure the organization’s
bottom-line goal of improving
profitability.
• Sales managers need to
analyze sales volume, costs,
and profit relationships by
product lines, territories,
customers, and
salespersons as well as
across sales and marketing
functions.
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Source: Triangle Images
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Sales Force Performance Evaluation
• Sales Force Performance
Evaluation (chapter 14)
must be measured and
evaluated to determine
commissions and bonuses
for salespeople and to make
promotion decisions.
• Performance evaluation is
used to do the following:
– improve sales force
productivity
– take corrective actions to
improve organizational
profitability and performance
Source: Triangle Images
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Changing with the Times
Old Marketing Perspective
marketing
largely viewed
from the seller
perspective
Product
strategy
emphasis on
management of
the marketing
mix
Pricing
Strategy
Target
market
Promotion
strategy
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marketing’s role
primarily to
create
exchanges
Place
strategy
satisfaction of
individual and
organizational
objectives
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A Formal Definition of Marketing
The new official definition of marketing approved by the AMA
in 2004 appears below.
“Marketing is an organizational function and a set of
processes for creating, communicating, and delivering value
to customers and for managing customer relationships in
ways that benefit the organization and its stakeholders.”
• Marketing is moving from a transaction orientation to a
customer relationship building orientation.
• New AMA definition shifts the perspective more to the
customer side by focusing on delivering value and
managing customer relationships.
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Changing with the Times
New Marketing Perspective
moved away from
a transaction
orientation
Product
strategy
focuses on
building long-term
customer
relationships
Pricing
strategy
Target
market
Promotion
strategy
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focuses on
delivering value
to customers
Place
strategy
focuses on
managing
customer
relationships
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Expanding Roles of Sales Managers
Based on the new marketing definition, there are three major implications
for sales managers:
• achieve a continuing
dialogue with
customers,
1.
Manage customer
relationships
• personalize treatment
of valued customers,
• increase customer
retention.
3.
Manage the hybrid
sales force
• build ongoing relationships
and mutually profitable
partnerships with customers,
• encourage salespeople to go
beyond selling and serve as
consultants and partners.
What sales
managers must do
work with
2.
Serve as customer
consultants
• telesalespeople,
• telemarketers,
• e-commerce salespeople,
• direct mailers,
• manufacturers’ agents.
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What Qualities Are Needed
to Be a Sales Manager?
6.
Improve sales force
productivity and
profitability
1.
Effectively lead and
motivate people
2.
Make good decisions
What a good sales
manager can do
5.
Monitor competitive
offerings
3.
Solve problems
creatively
4.
Provide outstanding
communication
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The Field Sales Force and
Headquarters Marketing Support Team
1.
Advertising
6.
Marketing research
2.
Sales promotion
How H.Q. supports
the sales force
5.
Product publicity
3.
Sales aids
4.
Trade shows
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The Field Sales Force and
Headquarters Marketing Support Team
7.
Marketing and
sales planning
12.
Internet
communications
8.
Forecasting
How H.Q. supports
the sales force
9.
Product planning and
development
11.
Public relations
10.
Market development
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Aligning Sales with Marketing
• To see an excellent video on aligning sales with
marketing, go to
– http://www.sellingpower.com/video/index.asp?date=1
1/29/2007
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What Marketing Can Learn from Sales
• To learn about what marketing can learn from
the sales department, go to
– http://www.sellingpower.com/video/index.asp?date=1
1/28/2007
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Megatrends Affecting
Sales Management
Sales managers must adapt to three major megatrends to
enhance their effectiveness and efficiency:
1. behavioral forces
2. technological forces
3. managerial forces
Source: Flying Colours Ltd
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Behavioral Megatrends
Affecting Sales Management
• Buyers’ attitudes, preferences, and behaviors are
changing, necessitating modification of selling strategies
and approaches.
1. Behavioral Forces
•
•
•
•
•
•
more expert and demanding buyers
rising customer expectations
micro-segmentation of domestic markets
expanding power of giant retailers
empowerment of customers
globalization of markets
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Technological Megatrends
Affecting Sales Management
• Today’s successful sales managers are those who can
make skillful and efficient use of technology to increase
their efficiency and productivity in serving customers.
These include: Forces
2. Technological
• sales force automation
• virtual sales offices
(home, automobile, or
virtually anywhere)
• electronic commerce
Source: Digital Vision
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Technological Megatrends
Affecting Sales Management
Sales Force Automation
•
•
•
•
portable computers
electronic data interchange
videoconferencing
multifunction cell phones and
satellite pagers
• voice mail and e-mail
• instant messaging
Source: Digital Vision
Virtual Sales Offices
• Home
• Office
• Virtually anywhere
Electronic Commerce
• Internet:
•
•
blogs, podcasting
screen-sharing, WebEx
• Intranet
• Extranet
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The Use of Technology (Part 1)
• To see a video on the effective use of
technology for generating leads to sell, go to
– http://www.sellingpower.com/video/index.asp?date=1
0/20/2006
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The Use of Technology (Part 2)
• To see a video on the effective use of
technology for identifying prospects to sell, go to
– http://www.sellingpower.com/video/index.asp?date=1
0/23/2006
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Using Technology to Sell Better
• Salespeople can
enhance their
productivity by using
telecommunication
tools
–
–
–
–
–
–
Intranets
Extranets
Computers
Fax machines
Pages
Cell phones
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Source: Triangle Images
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Using Technology to Sell Better
• For an interesting article on technology-enabled selling,
see
– http://www.computerworld.com/news/1998/story/0,11280,43417,
00.html
• For an interesting article on how technology can build
profitable relationships and deliver increased returns,
see
– http://www.infinityinfo.com/IndustriesTechnology.aspx
• Examples of technologies that salespeople are using
include
– http://www.cingular.com/blackberry8700c_consumer
– http://web.palm.com/promos/treo700w_microsoft.jhtml?cid=ms3
– http://www.pcworld.com/reviews/article/0,aid,123867,00.asp
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Technological Megatrends
Affecting Sales Management
Sales force
automation
• portable computers
(notebook, handheld,
and pocket PCs)
• electronic data
interchange
• videoconferencing
(via desktop, laptop,
or handheld
computers)
• multi-function cell
phones and satellite
pagers
• voice mail, e-mail, and
instant messaging
Technological
megatrends
affecting
sales
management
Electronic
commerce
• Internet
-- blogs
-- podcasting
-- screen-sharing
-- WebEx
• Extranets
• Intranets
Mobile virtual
sales offices
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Managerial Megatrends
Affecting Sales Management
3. Managerial Forces
• efforts to reduce selling
costs
• shift to direct marketing
alternatives
• certification of salespeople
• shortage of business-tobusiness salespeople
• developments in
information management
Source: Flying Colours Ltd
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Managerial Megatrends
Affecting Sales Management
Shift to directmarketing
alternatives
Mobile virtual
sales offices
Developments in
Information
Management
• direct mail
(catalogs,
brochures, and
sales letters)
• telemarketing
• teleselling
• personalized email
• kiosks
• facsimile
Managerial
megatrends
affecting
sales
management
Professional
certification
of salespeople
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• database
marketing
• data warehousing
• data mining
• push technology
Selling cost
reduction efforts
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Managerial Megatrends
Affecting Sales Management
Efforts to Reduce Selling Costs
• Median cost of a business-to-business sales call is more
than $250 (varies widely by industry and company).
• For some large industrial companies, a sales call can
cost $400 to $1,000 or more because of the unusual
complexity of both the selling process and the product
itself.
• To reduce selling costs, many manufacturers and
service providers are aggressively seeking alternatives
to large national sales forces (for example, use of
middlemen, part-time salespeople, and direct-marketing
efforts).
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Managerial Megatrends
Affecting Sales Management
Shift to Direct Marketing Alternatives
• To sell to organizational buyers, several direct marketing
alternatives support or bypass field salespeople:
1. direct mail
2. forms of telemarketing
– teleselling
– kiosks (or computer
salespeople)
– facsimile
– personalized e-mail
Source: © Mark Karrass/Corbis
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Managerial Megatrends
Affecting Sales Management
Certification of Salespeople
• Because of the public’s negativism toward selling, efforts
have been directed at certifying sales personnel.
• Certification usually requires that
a salesperson do these things:
Source: © Mark Karrass/Corbis
– gains a certain amount of practical
experience
– enrolls in educational seminars and
courses
– passes a sales competency exam
– provides some professional
references
– agrees to comply with a code of
conduct
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Certification of Salespeople
• For an interesting article on certification of
salespeople, see
– http://www.trainingmag.com/training/headlines/article
_display.jsp?vnu_content_id=1001996079
• Salespeople can attend professional certification
programs offered by firms such as
– http://www.davekahle.com/certification.htm
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Information Management Tools
• Sales managers and salespeople can adapt to
megatrends using various information
management tools.
• The four key trends in the management of
information include these:
(1) database marketing
(2) data warehousing
(3) push technology
(4) data mining
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Information Management Tools
1.
Database marketing: A database is a large
computerized file of customers’ and potential
customers’ profiles and purchase patterns.
2.
Data warehousing: A data warehouse is a very
large, corporate-wide database, built with data
from a number of information systems already in
place in the company.
3.
Push technology: Push technology is the latest
iteration of e-mail combined with data
warehousing to discern what your customers
need and exactly when they need it.
4.
Data mining: Data mining is the process of
using statistical analysis to detect relevant
patterns or relationships between and among
variables in a database.
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Information Management Tools
Push technology is the
latest iteration of e-mail
combined with data
warehousing to discern
what your customers
need and exactly when
they need it.
Database
marketing
A database is a large
computerized file of
customers’ and potential
customers’ profiles and
purchase patterns.
Push
technology
Information
management
trends
Data
warehousing
Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved.
Data mining refers to the
process of using
statistical analysis to
detect relevant patterns
or relationships between
and among variables in
a database.
Data
mining
A data warehouse is a
very large, corporatewide database, built with
data from a number of
information systems
already in place in the
company.
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How Well Are
Sales Managers Performing?
• Some major reasons why
some sales managers may fail
to perform at higher levels are
these:
– illogical selection of sales
managers
– inadequate sales management
training
– lack of a long-run customer
relationship orientation
– insufficient blending of sales,
marketing, and financial
knowledge
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Sales Management Hierarchy:
Skill and Ability Requirements
Administrative and
leadership ability
Managerial
ability
Supervisory
ability
Selling
ability
District
sales
manager
Regional
sales
manager
National
sales
manager
Vice
president
of sales
Sales
supervisor
Salesperson
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Developing Sales Managers
for the New Millennium
•
To succeed in the years ahead,
sales managers will need to focus
on the following:
– developing closer relationships
with customers
– treating salespeople as newly
empowered equals
– applying flexible motivational
skills in working with a
multicultural, hybrid sales force
– keeping up-to-date on the latest
technologies
– learning marketing and financial
skills in order to recommend
competitive strategies
– continually seeking ways to
exceed customer expectations
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Ethical Situation: What Would You Do?
On a sales call on one of your company’s best
customers, the purchasing agent smilingly tells
your salesperson: “I had a special arrangement
with the salesperson who used to call on me from
your company. Every time I placed an order, the
sales manager arranged a special gift for me. Are
you going to continue that policy?”
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