Transcript Figure 2-2: Hierarchy of Sales Objectives

Corporate goals
Maximize shareholder wealth
Business unit objectives
12% revenue growth
Marketing objectives
Increase product A’s market share by 2 points
Sales department objectives Achieve sales revenue of $210 million in product A
Sales district objective
Achieve sales revenue of $10.5 million in product A
Salesperson objective
Achieve sales revenues of $1.2 million in product A
Major account objective
Achieve sales revenues of $95,000 in product A
Figure 2-2: Hierarchy of Sales Objectives
Major
Accounts
Size of
Account
Middle Accounts
Minor Accounts
Number of Accounts
Figure 2-6: Customer Base Traingle
Chapter 2
Strategic
management
planning
-Mission
-Goals
-Strategies
Strategic
marketing
planning
-Situation analysis
-Segmentation & target marketing
-Marketing mix program
Sales force
strategy
-Market access strategy
-Account relationship strategy
Operating
budgets
-Promotion
-Selling expense
Michael E. Porter’s Three Generic Strategies
Broad
Target
1
Cost leadership
2
Differentiation
Narrow
target
3a.
Cost focus
3b.
Differentiation
focus
Lower cost
Differentiation
Competitive Advantage
Source: From Michael E. Porter, Competitive Advantage, New York; Free Press, 1985, p.12.
Table 2-1 Sales Manager’s and Marketing Executive’s Product
Classifications by Strategy
Sales manager Classification
Build
Hold
Harvest
Divest
Strategy
Strategy
Strategy
Strategy
Total
Build strategy
71ª
22
2
0
95
executive
Hold strategy
29
57
3
1
88
classification
Harvest strategy
10
49
23
6
88
Divest strategy
21
21
27
25
94
Total
129
149
55
32
365
Marketing
ªA total of 71 sales managers classified their products as build strategies out of 95 so classified by marketing
executives.
Source: William Strahle. An Exploratory Study of the Relationship Between Marketing and Slaes Strategy
(Bloomington: School of Business, Indiana University, unpublished doctoral dissertation, 1989), p. 153.
Traditional View
vs. Relationship View
The ultimate purpose of marketing
is to make a sale
The objective is to make the sale
and find the next customer
The ultimate purpose of marketing is to create a
customer
The objective is to satisfy the customer you
have by delivering superior value
Growth comes primarily from
finding customers
Growth comes primarily from enhanced
product offerings for existing customers
Supplier is valued for its products
and services
Supplier is valued for its present and future
problem solving capabilities
Source: Presentation by Frederick Webster, “Relationships in Marketing” at
Summer Marketing Educator’s Conference, August 8, 1993.
Figure 2-7: Traditional versus Relationship Marketing
Alternative Types of Account Relationships
Programmatic
Purchasing
Approach
Strategic Partners
3%
Major Accounts 7%
Contractual Relationships 20%
Repeat Transactions 70%
Transactional
Reactive:
respond to
demand
Selling
approach
Partnering:
create
demand
Design marketing program
Set advertising and promotion expenditure levels
Forecast sales
Revise expenditure categories
Estimate personal selling costs needed to
reach sales goals
Compare actual expenditures with plans
Figure 2-8: The Sales Budgeting Process
Request additional funds
as needed
Selling Expenses as a Percent of Sales
COMPANY SIZE:
Under $5 Million (MM)
$5 - $25 MM
$25 - $100 MM
$100 - 250 MM
Over $250 MM
PRODUCT OR SERVICE:
Industrial Products
Industrial Services
Office Products
Office Services
Consumer Products
Consumer Services
14.7%
10.5%
7.9%
3.5%
6.8%
4.1%
6.4%
9.4%
8.1%
5.4%
7.9%
Selling Expenses as a Percent of Sales
Selling Expenses as a Percent of Sales
INDUSTRY:
Business services
Communications
Educational services
Electronics
Fabricated metals
Health services
Hotels
Machinery
Manufacturing
Office equipment
Paper and allied products
Wholesale (Consumer goods)
Wholesale (Industrial goods)
Average
1.7%
9.8%
47.9%
4.2%
10.8%
19.9%
21.4%
10.1%
13.6%
9.0%
6.8%
3.7%
9.5%
6.9%
Translating Corporate Objectives into Sales Strategies
Corporate
Objectives
Marketing
Strategies
Become a major Supplier of Consumer Leisure Products and Services
Build
Hold
Harvest
Secure Added
Distribution
Outlets
Service
Current
Target Accounts
Trim Product Line
and
Push Volume Items
Help Dealers
Clear Out
Inventory
Maintain List
Prices and
Reduce Costs
Reduce Selling
Costs
Help Dealers Find
Substitutes or
New Suppliers
Promote Product
Variations
and
Improvements
Call on Large
Accounts
Sell New
Products to
Existing Account
Sales
Strategies
Offer Low Prices
to Attract
Business
Emphasize
Advertising
Support
Demonstrate
Superior New
Product Benefits
Offer Easy
Credit
Terms
Offer Trade
Deals to Gain
Acceptance
Offer Promotional
Allowances and
Help with
Displays
Identify and
Promote
Alternative Uses
Offer Key
Account or
National Account
Services
Emphasize
Advertising
Support
Show Superior
New Product
Benefits
Offer Easy
Credit
Terms
Divest
Sell Excess
Inventory to
Export Markets
or Jobbers