Transcript Document

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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Professional Sales
Foreword:
Good listeners generally make more sales than
good talkers.
-B. C. Holwick-
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
OBJECTIVES
After reading this chapter, you should be able to:
• Explain the role and nature of personal selling
and the role of the sales force.
• Describe the basics of managing the sales
force, and explain:
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– how to set sales force strategy
– how to pick a structure (territorial, product, customer,
or complex)
– how to ensure sales force size is appropriate
• Identify the key issues in recruiting, selecting,
training, and compensating salespeople.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
OBJECTIVES
After reading this chapter, you should be able to:
• Discuss supervising salespeople, including
directing, motivation, and evaluating
performance.
• Apply the principles of the personal selling
process, and outline the steps in the selling
process:
– qualifying
– preapproach and approach
– presentation and demonstration
– handling objections
– closing
– follow-up
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Professional Sales
Grapevine, Texas
• The city of Grapevine, Texas, became an important
tourism destination without benefit of beaches or
mountains or a Grand Canyon.
• What Grapevine had was:
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– available development land for development
– access to 7 major highways & Dallas-Fort Worth Airport
– a team of salespeople consisting of a mayor, city
council, and the city manager’s office “Go Team”
• Just north of the Dallas-Fort Worth metroplex and
DFW airport, Grapevine decided that tourism and
hospitality were the industries it wanted.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Professional Sales
Grapevine, Texas
• Grapevine decided that tourism, hospitality, and
shopping would create jobs and attract out-of-area
visitors as well as patrons from Dallas/Fort Worth.
• It was felt that these were complementary to the
historic nature of the community & would assist in
preserving the culture of a small town.
• The mayor, city council, and the city manager’s
office believed in the value of tourism & hospitality.
• Tommy Hardy, assistant city manager, was charged
to promote the destination and tourism economic
development of Grapevine.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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Professional Sales
Grapevine, Texas
• Tommy decided he would need to fully understand
tourism and the hospitality industry.
• This meant knowing major players, & understanding
their language, such as ADR, and “REVPAR.”
• It also meant that Grapevine needed to develop a
marketing plan with desired target hospitality
companies, and pursue them with professional
marketing/sales strategies.
• The city of Grapevine worked closely with
developers, architects & the financial community.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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Professional Sales
Grapevine, Texas
• Tommy & staff made calls on targeted companies,
conducted tours, hosted receptions and provided
continuous follow-up to “close the sale.”
• Tommy said they were never afraid to go to the
private sector for assistance in planning & marketing.
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– “We always took big steps” he said, and “the private
community supported us.”
• The mayor of Grapevine has great civic pride, and
worked aggressively with Tommy and staff to bring
hospitality & retailing companies to the community.
– he has a reputation as a “closer”, clinching many deals
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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Professional Sales
Grapevine, Texas
• Sales and bed taxes generated by the complex
support the Grapevine Convention & Visitors Bureau,
which organizes events such as GrapeFest.
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– proven very popular with the local community and day
visitors from the metroplex, adding to tourism revenue
• An area in northeast Grapevine was targeted for
commercial tourism/hospitality development.
• One of the earliest companies was the Gaylord Texan
mega-resort, which opened in 2004 with 1,511 hotel
rooms and a 400,000-square-foot convention center.
– nine additional hotels then located in the area
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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Professional Sales
Grapevine, Texas
• In 2006 Great Wolf Resorts began construction of a
$60 million, all-suite hotel, 50,000-square-foot
indoor water park, and a conference center.
• Tourism development planners know the importance
of retail shopping, and a huge retail shopping area
was developed, including Grapevine Mills Mall.
• The spectacular Bass Pro Shops Outdoor World
with 200,000 square feet of space was built in close
proximity and attracts 2 million visitors per year.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Professional Sales
Grapevine, Texas
• Tourism development also occurred outside the
destination corridor within the historic downtown
Grapevine area and other areas.
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– the Grapevine Vintage Railroad connects Grapevine
with the renovated Fort Worth Stockyards
– a complex of upscale restaurants known as the Epicenter
was developed on South Main Street in Grapevine
• Tourism in Grapevine means 13 million visitors
annually, and thousands of individuals are directly
employed in the industry, providing a healthy
economy.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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Professional Sales
Grapevine, Texas
• Tourism has allowed downtown Grapevine to
flourish and has encouraged historical preservation
and cultural growth in the arts.
• Grapevine also saw over a 22% increase in its
REVPAR, over twice the rate of its competitors.
• None of this would have been possible without the
teamwork between the private sector and the public.
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– nor without sales planning & strategy by a dedicated
team who wanted to see Grapevine grow in a desired
and beneficial manner
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Management of Professional Sales
Introduction
• Success or failure within the hospitality industry
ultimately rests on the ability to sell.
• No member of the hospitality industry can be seen
as being above the need “to sell.”
• Discourteous front-desk clerks and grumpy cashiers
are part of one’s sales force.
• These and all others who face the public can drive
away or attract business.
• Successful owners and managers know that they
must sell continuously.
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By Philip Kotler, John Bowen and James Makens
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Management of Professional Sales
Introduction
• County commissioners, tax officials, planning boards,
the press, bankers, and local visitor center must all be
sold on one’s hospitality business.
• Libraries could be filled with tales of lost sales or
fractured guest relationships because of a curt
response or an unsavory attitude.
• Everyone must sell, but a few individuals have the
specific responsibility for ensuring payrolls can be
met, invoices paid, and fair return on investment
achieved.
• These are the professional salespeople.
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By Philip Kotler, John Bowen and James Makens
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Management of Professional Sales
Classification of Sales Positions
– Deliverer - positions in which the salesperson’s job is
predominantly to deliver the project
– Order taker - positions in which the salesperson is
predominantly an inside or outside order taker
– Missionary - in which the salesperson is called on to
build goodwill or to educate actual or potential users
– Technician - major emphasis on technical knowledge
– Demand creator - positions that demand the creative sale
of tangible products or of intangibles
– Strategic client partner - planning, sales, marketing, and
areas affecting success of client and relationship between
client and supplier
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
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Nature of Hospitality Sales
Introduction
• Sales personnel serve as the company’s personal
link to customers.
• The sales representative is the company to many
customers & brings back much needed intelligence.
• While cost estimates for making a personal sales
call vary one conclusion remains constant:
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– personal selling is the most expensive contact and
communication tool used by the company
• Sales orders are seldom written on the first call
and often require five or more calls, particularly
for larger orders.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Nature of Hospitality Sales
Personal Selling
• Despite the high cost, personal selling is often the
most effective tool available.
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Table 15-1
Cost of
obtaining
a new client.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Nature of Hospitality Sales
Sales Tasks
• Sales representatives perform one or more of the
following tasks for their companies:
• Prospecting - finding & cultivating new customers.
• Targeting - sales reps decide how to allocate their
scarce time among prospects and customers.
• Communicating - information about the company’s
products and services.
• Selling - approaching, presenting, answering
objections, and closing sales.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Nature of Hospitality Sales
Sales Tasks
• Servicing - services to the customers—consulting
on their problems, rendering technical assistance,
arranging financing, and expediting delivery.
• Information gathering - market research and
intelligence work and filling in call reports.
• Allocating - deciding to which customers to allocate
scarce products to during product shortages.
• Maintaining strategic partnerships - senior
salespeople including the sales manager provide
valuable planning assistance to clients.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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Nature of Hospitality Sales
The Task Mix
• During product shortages, such as a temporary
shortage of hotel rooms during a major convention,
sales reps find themselves with nothing to sell.
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– some companies jump to the conclusion that fewer
sales representatives are needed
• This overlooks the salesperson’s other roles:
– allocating the product
– counseling unhappy customers
– selling other company products not in short supply
• It ignores the long-run nature of hospitality sales.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Nature of Hospitality Sales
The Task Mix
• Many conventions & conferences are planned years
in advance & salespeople must often work with
meeting/convention planners 2-4 years in advance.
• Resorts in the US have concentrated much of their
selling efforts on meetings and conferences, which
by now represent 35% or more of their customers.
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– not achieved by viewing sales as a short-run tactic
• As companies move toward a stronger market
orientation, their sales forces need to become
more market focused and customer oriented.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
tab
© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Nature of Hospitality Sales
The Task Mix
• Marketers believe a sales force will be more effective
if members understand marketing as well as selling.
• A hospitality industry writer concluded:
– closing sales has more to do with professionalism than
anything else
– understanding the identity of real prospects increases
sales productivity
– sales force members can save hours of time by having
information about prospect group clients
– it is critical to know what groups have a history of
booking rooms in your type of hotel
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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Sales Force Objectives
Introduction
• Hospitality companies typically establish objectives
for the sales force, essential for two reasons:
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– objectives ensure that corporate goals are met
– they assist sales force members to plan & execute
their personal sales programs
• Sales force objectives must be customer designed
annually for each company.
• Individual sales objectives are established to support
corporate goals and marketing and sales objectives.
• Annual marketing and sales objectives are normally
broken into quarterly and monthly objectives.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
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Sales Force Objectives
Common Objectives
• Although custom designed, there are objectives
commonly employed by hospitality industry:
–
–
–
–
–
–
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Sales Volume
Sales Volume by Selected Segments
Sales Volume and Price/Margin Mix
Upselling and Second-Chance Selling
Market Share or Market Penetration
Product-Specific Objectives
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
tab
© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Sales Force Structure and Size
Introduction
• The diverse nature of the hospitality industry means
different sales force structures & sizes have evolved.
• Sales force structure within the airline industry is
different from that of a hotel or cruise line.
• Most restaurants do not use a sales force but depend
on other parts of the mix, such as advertising and
sales promotion.
• Structure of a hotel sales department depends on
the culture of the organization, size of the property,
nature of the market, and type of hotel.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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Sales Force Structure and Size
Territorial-Structured Sales Force
• In the simplest sales organization, each sales
representative is assigned an exclusive territory
in which to represent the company’s full line.
• A territorial sales organization is often supported
by many levels of sales management positions.
• Each higher-level sales manager takes on increasing
marketing and administration work in relation to the
time available for selling.
• In fact, sales managers are paid for management
skills rather than their selling skills.
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By Philip Kotler, John Bowen and James Makens
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Sales Force Structure and Size
Territorial-Structured Sales Force
• In designing territories, the company seeks certain
characteristics, based on territory size & shape.
• Salespersons in restaurant & hotel supply companies
are often assigned to a territory.
• Hotels with international markets often assign their
international salespeople to a territory such as
Europe or a specific country such as France.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Sales Force Structure and Size
Territorial-Structured Sales Force
• Territories are formed by combining smaller units,
such as counties or states, until they add up to a
territory of a given sales potential or workload.
• Territories can be designed to provide either equal
sales potential or equal workload.
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– each offers advantages at some cost
• This doesn’t concern a sales force on straight salary,
but when sales representatives are compensated
partly on commission, territories vary in their
attractiveness even though workloads are equal.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
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Sales Force Structure and Size
Market-Segment-Structured Sales Force
• Companies often specialize their sales forces along
market segment lines.
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– the most common structure within the hotel industry
• Separate sales forces can be set up by different
industries for the convention/meeting segment, the
incentive travel market, and other major segments.
• The advantage of market specialization is that each
force gains knowledge about specific segments.
• The major disadvantage arises when members of a
segment are scattered around the country or world.
– this vastly increases the travel costs
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By Philip Kotler, John Bowen and James Makens
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Sales Force Structure and Size
Market-Channel-Structured Sales Force
• The importance of marketing intermediaries has
created structures to serve marketing channels.
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– the cruise line industry has historically depended on
travel agents for the bulk of their sales
– hotels such as those near historical sites receive
substantial bookings from motor coach tour brokers
• Location, size, and type of hospitality company
greatly affect relative importance of intermediaries.
– and affects whether a company designs its sales force
structure by travel intermediary
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Sales Force Structure and Size
Customer-Structured Sales Force
• A customer-structured sales force recognizes specific
customers critical to the success of the organization.
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– the sales force is usually organized to serve these
accounts through a key or national account structure
• Large accounts (key, major or national accounts) are
often singled out for special attention & handling.
• If a company has several such accounts, it may
create a national account management (NAM)
division.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Sales Force Structure and Size
Customer-Structured Sales Force - NAM
• NAM is growing for a number of reasons.
– buyer concentration increases via mergers & acquisitions
– buyers are centralizing their purchases
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• In organizing a NAM division, a company faces a
number of issues, including:
– how to select national & manage accounts
– how to develop, manage & evaluate a national account
manager
– how to organize a structure for national accounts
– where to locate NAM in the organization
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
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Sales Force Structure and Size
Combination-Structured Sales Force
• Some hotels & resorts have a sales force structured
by product, market segment or channel & customer.
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– often a reaction to internal & market forces rather
than the result of strategic thinking
• A large hotel might have a separate sales force for:
–
–
–
–
catering/banquet (product)
convention/meeting (market segment)
tour wholesale (marketing intermediary)
national accounts sales force (customer)
• Proponents believe it encourages the sales force to
reach all or most available customers.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
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Sales Force Structure and Size
Combination-Structured Sales Force
• Opponents feel this sales force structure indicates
the hotel is trying to be all things to all people in
the absence of long-run goals and strategies.
• Regardless of structure used by a hotel or resort, a
particular market segment neglected by many North
American hoteliers is local markets.
• A sales manager must be aware of the local market
and develop a sales force structure appropriate for
penetrating this market.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Sales Force Structure and Size
Sales Force Size
• As sales reps are one of the company’s most
expensive assets, a workload approach can help
establish sales force size. This method consists of :
– grouping customers according to annual sales volume
– establishing desirable call frequencies for each class
– the number of accounts in each size class is multiplied
by the call frequency to arrive at the total workload for
the country in sales calls per year.
– average number of calls per year a rep can make is
determined
– number of sales reps needed is determined
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By Philip Kotler, John Bowen and James Makens
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Sales Force Structure and Size
Sales Force Size
• Size of a sales force is determined by market changes,
competition, corporate strategy & policies.
• Several of factors that influence the size of a hotel’s
sales force are:
–
–
–
–
–
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corporate/chain sales support
use of sales reps
team selling
electronic and telephone sales
travel intermediary dependency
• A professional sales manager must be aware of
changing trends and new technology.
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By Philip Kotler, John Bowen and James Makens
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Organizing the Sales Department
Introduction
• Hospitality companies traditionally design
departments along functional lines.
• Today’s sales managers may have two types of
salespeople within their departments.
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– an inside sales force and a field sales force
• The term inside sales can be misleading because
many field salespeople spend a great deal of their
time inside the hotel.
– calling clients and prospects & meeting with them
– making arrangements with other departments
– answering mail and completing sales reports
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Organizing the Sales Department
Information Needed by the Sales Force
• Salespeople need a database of customers/clients to
helps them to prepare for sales calls & answer
questions while talking with customers.
• The purpose is not to overwhelm the sales force
with data but assist them to better serve the client
and in turn realize sales success.
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Organizing the Sales Department
Reservations Department
• The reservations department is a very important
inside sales area reservationists may speak with
80% of a company’s customers.
• Unfortunately, reservations is sometimes not viewed
as part of the sales team & may have little
communication with the sales department.
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– in worst-case scenarios, they may find themselves at odds
• Training reservationists to be good company
representatives and teaching them how to sell
will pay back big dividends in the long run.
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Organizing the Sales Department
Field Sales Force - Commissioned Reps
• Sales managers face an increasingly complex
marketplace, creating the need to review the
organizational design of the field sales force.
• Commissioned Reps - Hotels & resorts commonly
use commissioned sales reps in areas where market
potential does not justify a salaried salesperson.
III
– commissioned reps normally represent several different
properties, but attempt not to represent competing clients
• The relationship between sales rep & hotel is not
always satisfactory, often because reps are hired
without conducting a careful analysis.
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Organizing the Sales Department
Field Sales Force - Commissioned Reps - Simple Rules
• Select markets with care. Distant markets should be
selected to match corporate goals & marketing/sales
objectives.
• Visit the market personally. Meet with prospective
sales reps, examine their offices, check references.
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– note their personal appearance, ask for a list of clients
– clear the rep through police & the Better Business Bureau
• Include the sales rep as part of the hotel’s sales
force.
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Organizing the Sales Department
Field Sales Force - Salaried Sales Force
• Most hospitality industry sales force members are
paid a salary plus benefits, with additional
commissions, bonuses & profit sharing.
• Traditionally, hospitality companies have employed
members of the sales force to perform the sales
function primarily in an individualized manner.
• This system continues to be the backbone of
hospitality sales, but newer forms of organizing
a field sales force are gaining acceptance.
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Organizing the Sales Department
Field Sales Force - Team Sales
• Team sales have become a necessity in many
industries & hospitality is no exception.
• The concept of a sales team is two or more persons
working in concert toward a common sales objective.
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– not necessarily from the same company
• The purpose is to accomplish objectives through
synergism of two or more people impossible or
unduly costly through individual sales efforts.
• People from various disciplines & departments are
sometimes brought together to improve morale,
teach teamwork, and cross-educate.
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Organizing the Sales Department
Field Sales Force - Team Sales
• In addition to traditional objectives, like increased
occupancy, other nonquantifiable objectives are
sometimes established for teams.
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– generally dealing with enhancing image & goodwill
or using the team as a human resource training pool
• Teams in the hospitality industry have traditionally
been used for specific tasks, which include:
– sales blitzes; travel missions
– charity promotions & community improvement programs
• The primary purpose for team sales should be to
improve sales & competitive position.
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Relationship Marketing and Strategic Alliances
Introduction
• The goal of personal selling was traditionally
viewed as a specific contract with a customer.
• In many cases the company is not seeking just a
onetime sale, it has targeted a major account it
would like to win & serve for a long period of time.
• The company wants to demonstrate it is capable of
serving the account in a superior way, particularly
if a committed relationship can be formed.
• Selling to establish a long-term collaborative
relationship is more complex than a short-run
approach.
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Relationship Marketing and Strategic Alliances
Introduction
• Today’s large, often global customers prefer
suppliers who can sell & deliver a coordinated
set of products & services.
• Companies recognize sales teamwork increasingly
is the key to winning and maintaining accounts.
III
– and asking their people for teamwork doesn’t provide it
• They need to revise their compensation system to
give credit for work on shared accounts, set better
goals and measures & emphasize teamwork in their
training programs.
– while honoring the importance of individual initiative
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Relationship Marketing and Strategic Alliances
Relationship Marketing
• Relationship marketing acknowledge that important
accounts need focused, continuous attention.
III
– salespeople must do more than call when they think
customers might be ready to place orders
– they should monitor key accounts, know their problems,
be ready to serve them & try to be part of the client’s team
• When implemented properly, the organization begins
to focus as much on managing customers as on
managing products.
• Companies should also realize that relationship
marketing, it is not effective in all situations.
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Relationship Marketing and Strategic Alliances
Strategic Alliances
• Strategic alliances are a highly developed form of
relationship marketing common between vendor &
buyer or noncompeting vendors & a common buyer.
• A strategic alliance may involve the following:
III
– confidences; database; market knowledge
– planning resources; risks; security; technology
• Strategic alliances directly affect the nature of
the professional sales function within hospitality
companies.
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Relationship Marketing and Strategic Alliances
Strategic Alliances - Three Types in the Hotel Industry
• One-night stands. Short-term opportunistic relations,
such as cross-advertising between a hotel and a
restaurant.
• Affairs. Medium-term tactical relationships. Hotels
may participate with airlines in frequent-flyer
programs.
• I dos. Equivalent to marriage, where parties expect
long-term commitment. In some cases, equity
investment is essential.
III
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Relationship Marketing and Strategic Alliances
Strategic Alliances - Necessities
• Strategic alliances have become a necessity due
to a variety of factors:
–
–
–
–
–
–
–
III
globalization
complicated customer needs
large customers with multiple locations
the need for technology
highly interdependent vendor/buyer relationships
intensified competition
low profitability within the hospitality industry
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Recruiting and Training a Professional Sales Force
Introduction
• At the heart of a successful sales force operation is
the selection of effective sales representatives.
• Performance difference between an average and
a top sales representative can be considerable.
III
– a survey revealed the top 27% of the sales force
brought in over 52% of the sales
• Beyond differences in sales productivity are the
wastes entailed in hiring the wrong person.
– finding & training a new salesperson plus the cost
of lost sales can be substantial, and a sales force with
many new people is generally less productive
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Recruiting and Training a Professional Sales Force
What Makes a Good Sales Representative
• Most customers say they want sales representatives
to be honest, reliable, knowledgeable, and helpful.
• A study of superachievers found that super sales
performers exhibit the following traits:
III
– risk taking, powerful sense of mission, problem-solving
bent, care for the customer, and careful planning
• One of the shortest lists concluded that the effective
salesperson has two basic qualities:
– empathy, the ability to feel as the customer does
– ego drive, a strong personal need to make the sale
15
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Recruiting and Training a Professional Sales Force
A Profile of Desired Characteristics
• Management of a hospitality company must
determine a desired sales force profile.
III
– this is not solely the responsibility of a sales manager
• Desired characteristics such as must be enunciated
clearly by management.
– honesty, personal integrity, self-esteem, confidence,
inner motivation, desire to excel
• Both employer and salesperson need to recognize
that success cannot be realized if the two parties
are incompatible.
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Recruiting and Training a Professional Sales Force
Matching Career Acquisitions & Corporate Objectives
• The aspirations of a salesperson must first be clearly
understood by that person and clearly communicated
to the potential employer.
• The hospitality industry offers many advantages:
– the industry is fun
– clients are generally personable and willing to listen
– fellow salespeople and other colleagues are generally
people oriented, gregarious, & enjoyable
– opportunities for travel exist
– opportunities for movement within the industry exist
– management opportunities exist
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Recruiting and Training a Professional Sales Force
Matching Career Acquisitions & Corporate Objectives
• Career promotion to general manager, from sales in
hotels & resorts, historically has not often occurred.
III
– but is beginning to happen more frequently
• General Manager positions generally call for
individuals with broader experience and training.
– food & beverage, front desk, and other operational areas
• Experienced and astute sales managers seem to
develop a sixth sense for determining whether a
candidate’s personality and background truly
match the sales position.
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Recruiting and Training a Professional Sales Force
Sales Force Training
• Sales training is vital to success, yet unfortunately it
remains a weak link within the hospitality industry.
III
– training is a career-long endeavor
• Sales force members require training in these areas:
– product/service training; sales techniques
– policies, procedures, and planning
• While sales training is most effective when
customized, general factors contributing to success
or failure of a salesperson should be considered
when developing a sales training program.
– effectiveness can be enhanced by learning sales basics
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Recruiting and Training a Professional Sales Force
Sales Force Training
• Six factors contribute to sales failure, and each is
relevant to salespeople in the hospitality industry:
–
–
–
–
–
–
III
poor listening skills
failure to concentrate on top priorities
lack of sufficient effort
inability to determine customer needs
lack of planning for sales presentations
inadequate product/service knowledge
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Recruiting and Training a Professional Sales Force
Training Materials and Outside Training Assistance
• Formal training may sometimes be necessary in
which technical details must be memorized.
III
– interactive video training has proven effective
– many companies are adding web-based e-learning
to their sales training programs
• Many sales managers err in purchasing an expensive
training system of programmed learning.
– training programs must be carefully selected
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Recruiting and Training a Professional Sales Force
Training Materials and Outside Training Assistance
• Materials specifically designed for the hospitality
industry are offered by:
III
– Hotel/Motel Educational Association
– CLIA (Cruise Lines International Association)
– National Restaurant Association
• Universities are now developing strategic
relationships with companies and trade associations
to train management and staff on an ongoing basis.
• Preparatory training is enhanced by skills learned in
the workplace, as ultimately, all training is perfected
on the job.
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Recruiting and Training a Professional Sales Force
Training Materials and Outside Training Assistance
• Some managers believe effective training consists
of learning from one’s trials & errors while selling.
• This extremely threatening, costly, sink-or-swim
system, creates unnecessary turnover & morale
problems.
• It is critical for the sales manager to monitor
progress and offer encouragement & suggestions
for improving areas of weakness.
III
– effective sales managers are effective teachers
• Individuals who do not enjoy teaching or coaching
may find their own management careers are limited.
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Managing the Sales Force
Introduction
• Research & study on this subject clearly indicate that
successful sales management is not the result of
following a formula.
• Long-run successful sales managers exhibit a
strong affinity for subordinates, are willing to
learn continuously & must be reasonably bright.
• Market conditions often have inordinate influence
over failure or success, and despite their skills or
lack thereof, sales managers may look weak or
triumphant.
III
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Managing the Sales Force
Selecting Sales Strategies
• Sales successes within the hospitality industry
depends on development of excellent long-run
relationships with clients or accounts.
• This 80/20 concept says that a majority of a firm’s
business comes from a minority of its customers.
III
– the key, national, or major accounts
• Certain corporate clients & travel intermediaries,
such as travel agents, generally serve as key accounts,
and provide large numbers of customers.
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Managing the Sales Force
Selecting Sales Strategies - Six General Ones
• Prevent erosion of key accounts. It does little good
to attract new customers if key customers are lost.
• Grow key accounts. Evidence indicates companies
are willing to reduce the number of providers if these
companies meet requirements for service and price.
• Grow selected marginal accounts. Marginal
accounts can become key accounts given sufficient
time and a consistent level of service.
• Eliminate selected marginal accounts. Some
accounts result in net losses for a hospitality
company.
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Managing the Sales Force
Selecting Sales Strategies - Six General
• Retain selected marginal accounts but
provide lower-cost sales support. Many low-yield
accounts cannot bear the cost of personalized sales
calls or expensive promotions.
• Obtain new business from selected prospects. The
process of obtaining new accounts is costly and time
consuming.
III
– the high cost dictates that the customer must have the
potential to contribute significantly to profits
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Managing the Sales Force
Sales Force Tactics
• Personal selling is an ancient art, and effective
salespersons have more than instinct.
III
– they are trained in tactics to achieve sales success
• All the sales training approaches try to convert a
salesperson from being a passive order taker to an
active order getter.
• In training salespeople to acquire signed orders
(contracts), there are two basic approaches
– a sales-oriented approach
– a customer-oriented approach
15
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Managing the Sales Force
Sales Force Tactics - Eight Major Tactics
• Prospecting and Qualifying - to identify prospects.
• Preapproach - learn as much as possible about the
prospect company.
• Approach - get the relationship off to a good start,
involving the salesperson’s appearance, opening lines,
and follow-up remarks.
• Presentation and Demonstration - tell the product
“story” to the buyer, following the AIDA formula of
gaining attention, holding interest, arousing desire,
and obtaining action.
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Managing the Sales Force
Sales Force Tactics - Eight Major Tactics
• Negotiation - the two parties need to reach
agreement on the price and other terms of sale.
• Overcoming Objections - resistance can be
psychological or logical. The salesperson needs
training in the broader skills of negotiation.
• Closing - know how to recognize closing signals,
including physical actions, statements or comments,
and questions from the buyer.
• Follow-Up/Maintenance - necessary to ensure
customer satisfaction and repeat business.
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Managing the Sales Force
Motivating a Professional Sales Force
• Some sales representatives put forth their best effort
without any special coaching from management.
III
– they are ambitious, self-starters to whom selling
is the most fascinating job in the world
• The majority of sales reps require encouragement &
incentives to work at their best level, especially true
of field selling, due to factors which include:
– the nature of the job
– human nature
– personal problems
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Managing the Sales Force
Motivating a Professional Sales Force
• Managers must be able to convince salespeople that
they can sell more by working harder or by being
trained to work smarter.
• They must also be able to convince salespeople
that rewards for better performance are worth the
extra effort.
III
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Managing the Sales Force
Sales Force Compensation
• To attract & retain sales representatives, the company
has to develop an attractive compensation package.
• Sales representatives would like:
III
– income regularity, extra reward for an above-average
performance, fair payment for experience and longevity
• Management would like:
– control, economy, and simplicity
• Management must determine the level & components
of an effective compensation plan.
– which must bear some relation to the going market price
for the type of sales job and required abilities
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Managing the Sales Force
Sales Force Compensation
• The company must determine the components of
compensation:
III
– a fixed amount; a variable amount
– expenses; fringe benefits
• Importance of monetary rewards to a hospitality
sales force must not be minimized.
– they are expected to maintain a large fashionable wardrobe,
work long hours, experience stress & often
give up family experiences for the sake of their career
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Managing the Sales Force
Supplementary Motivators
• Periodic sales meetings provide a social occasion,
a break from routine, a chance to meet & talk with
“company brass,” and to air feelings & identify
with a larger group.
III
– meetings can also be used for training
• Companies also sponsor sales contests to spur the
sales force to a special selling effort above what
would normally be expected.
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Managing the Sales Force
Evaluation and Control
• We have been describing the feed-forward aspects of
sales supervision, how management communicates
what the sales representatives should be doing and
motivates them to do it.
• Good feed forward requires good feedback, which
means getting regular information from sales
representatives to evaluate their performance.
III
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Managing the Sales Force
Sales Quotas
• Many companies set quotas prescribing what their
sales reps should sell during the year and by product
III
– compensation is often tied to degree of quota fulfillment
• The company prepares a sales forecast, the basis for
planning production, workforce size, and financial
requirements.
• Management establishes sales quotas for its regions
and territories, which typically add up to more than
the sales forecast.
– sales quotas are often set higher in order to stretch
sales managers & salespeople to perform their best
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Managing the Sales Force
Sales Quotas - Three Schools of Thought
• The high-quota school sets quotas higher than most
sales representatives will achieve but are attainable.
• The modest-quota school sets quotas a majority of
the sales force can achieve.
• The variable-quota school thinks individual
differences among sales representatives warrant
high quotas for some & modest quotas for others.
III
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Managing the Sales Force
Developing Norms for Salespeople
• New sales representatives should be given more than
a territory, a compensation package, and training.
III
– they need supervision, the expression of the employers’
natural, continuous interest in the activities of their agents
– through supervision, employers hope to direct & motivate
the sales force to do a better job
• Companies vary in how closely they direct their
sales representatives.
– those on commission generally receive less supervision
– salaried reps are likely to receive substantial supervision
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Managing the Sales Force
Developing Norms for Salespeople
• The number of calls that an average salesperson
makes during a day has been decreasing.
• The downward trend is owing to increased use of
technology & a drop-in cold calls due to better
market research data for pinpointing prospects.
III
– also difficulties reaching prospects because of traffic
congestion, busy prospect schedules & other issues
• Companies often decide how many calls to make a
year on particular-sized accounts, with call norms
depending on expected account profitability.
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Managing the Sales Force
Developing Norms for Salespeople
• Regardless of how a force is structured, individual
sales reps must classify their customer base.
• A rep responsible for channel intermediaries quickly
learns that not all are capable of producing the same
sales volume/profit.
III
– equally true for the conference/meeting segment, and to
some degree for national accounts
• Not all prospects may be contacted every year, and it
is important to know 2nd & 3rd third-tier prospects.
– so they can be contacted if a slowdown occurs in the top
targeted groups
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Managing the Sales Force
Developing Norms for Salespeople
• Companies set up prospecting standards for a number
of reasons, because if left alone, many sales reps
spend most of their time with current customers
• Current customers are better known quantities, and
reps can depend on them for some business, while
a prospect might never deliver any business.
• Unless sales representatives are rewarded for
opening new accounts, they might avoid new
account development.
III
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Managing the Sales Force
Using Sales Time Efficiently
• A tool for using time efficiently is the annual call
schedule, showing which customers & prospects to
call on, in which months, & activities to carry out.
III
– another tool is time-and-duty analysis
• Companies are constantly seeking ways to improve
sales force productivity, using such methods as:
– training sales reps in the use of “phone power”
– simplifying record-keeping
– using the computer to develop call & routing plans
and to supply customer & competitive information
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Managing the Sales Force
Trade Shows
• Trade shows are commonly used as a means of
generating sales leads, keeping in touch with
commercial customers, and writing business.
• The cost/return effectiveness of trade shows is
often placed in peril or disregarded through
lack of effective planning and control.
• Commitments to more effective planning would
enhance the productivity of trade shows for most
companies.
III
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Managing the Sales Force
Trade Shows - Steps to Improve Effectiveness
• Construct a mailing list of prospects - using the list
of expected visitors from trade show management.
• Identify potential leads - and communicate with
them before the show.
• Promote the show - with incentives that reflect the
company’s theme, products, and services.
• Send letters to prospective buyers - inviting them
to make a personal contact at the show.
• Keep good records - of visitor contacts at the show.
• Follow up - with qualified prospects after the show.
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Managing the Sales Force
Trade Shows - Before the Show
• Review trade show objectives - with the sales force.
• Designate a trade show captain - responsible for
managing sales activities.
• Designate times - when certain salespersons are
expected to work the booth.
• Prohibit - smoking, drinking, eating, and bunching
together in the trade booth.
• Show sales force members - how to deal with
difficult visitors, greet customers & prospects, ID
nonprospects & use data acquired at the show.
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Managing the Sales Force
Other Control Techniques
• One important way management obtains information
about its sales source is sales reports.
III
– reports are divided between activity plans & write-ups
of activity results
• Additional data comes by personal observation,
customer letters & complaints, surveys, and
conversations with other sales representatives
• Many hospitality companies require reps to develop
an annual territory marketing plan to outline their
program for developing new accounts & increasing
business from existing accounts.
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Managing the Sales Force
Other Control Techniques
• Reports provide raw data from which sales managers
can extract key indicators of performance, such as:
–
–
–
–
–
–
–
–
–
average number of sales calls per salesperson per day
average sales call time per contact
average revenue per sales call
average cost per sales call
entertainment cost per sales call
percentage of orders per hundred sales calls
number of new customers per period
number of lost customers per period
sales force cost as a percentage of total sales
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Managing the Sales Force
Other Control Techniques
• These indicators answer several useful questions:
–
–
–
–
–
–
III
are sales representatives making too few calls per day?
are they spending too much time per call?
are they spending too much on entertainment?
are they closing enough orders per 100 calls?
are they producing enough new customers
are they holding on to the old customers?
• The sales force’s reports along with other
observations supply the raw materials for
evaluating members of the sales force.
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KEY TERMS
• Allocating. Sales representatives decide to which
customers to allocate scarce products.
• Communicating. Sales representatives
communicate information about the company’s
products and services
• Information gathering. Sales representatives
conduct market research and intelligence work
and fill in a call report.
• Prospecting. The process of searching for new
accounts.
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KEY TERMS
• Selling. Sales representatives know the art of
salesmanship: approaching, presenting, answering
objections, and closing sales.
• Servicing. Sales representatives provide various
services to the customers: consulting on their
problems, rendering technical assistance, arranging
financing, and expediting delivery.
• Targeting. Sales representatives decide how to
allocate their scarce time among prospects and
customers.
III
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EXPERIENTIAL EXERCISES
Try This !
• Conduct an interview with a salesperson for a
hospitality or tourism organization.
III
– ask the salesperson about the job
– find out what a typical day is like, and what they
like and dislike about the job
– ask how they feel technology will affect the sales
department in the future
• You may of course ask other questions that are of
interest to you.
– write up your finding in a report
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INTERNET EXERCISES
Try This !
Support for this exercise can be found on the Web
site for Marketing for Hospitality and Tourism,
www.prenhall.com/kotler
• Find a hotel Web site that has a section for
meeting planners. Do these sites appear to be
taking the place of a salesperson or offering
assistance to the sales department?
• Include the names of the sites you have visited
in your response.
III
15
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
tab
© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
END
III
CHAPTER END
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
15
© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458