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behavioral forces

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• Rising customer expectations • Globalization of markets • Demassification of domestic markets:

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technological forces

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• Sales forces automation • Virtual sales offices • Electronic sales channels

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managerial forces

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• A shift to direct marketing alternatives • Outsourcing of sales functions • Blending of the sales and marketing functions

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Trends affecting long-term management in the 21st century

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1) transactional paradigm 2) nimble and adaptable 3) removing functional barriers 4) management styles have to change 5) leveraging available technology 6) performance evaluation

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transactional paradigm

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building long term relationships with customers

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nimble and adaptable

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change and adapt quickly to satisfy customer needs

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removing functional barriers

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gaining greater job ownership and commitment from salespeople (make sure everyone is on the same page)

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management styles have to change

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shift from commanding to coaching

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leveraging available technology

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using technology to make the business as efficient as possible

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performance evaluation

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incorporate the full range of activities and outcome relevant within sales jobs today (make it useful)

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innovation

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willingness to think outside the box, do things differently and embrace change (start thinking of failure as success training)

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technology

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the broad spectrum of technological tools now available to sales managers and organizations (changing how organizations work)

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leadership

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capability to make things happen for the benefit of the sales organization and its customers (title doesnt make you a leader)

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transactional selling

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-A series of transactions, each one involving separate organizations entering into an independent transaction involving the delivery of a product or service in return for compensation -Used to be the dominant sales approach

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relationship selling

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building long-term relationships between customers and their suppliers

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relationship selling EXAMPLE

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- Xerox has identified fewer than 500 vendors with which it wants to do business with now, but in 1989 they had more than 5000 vendors supplying them. (buyers are narrowing their vender pool) - P&G has aggressively reorganized its client teams so they are stationed very close to the company's major accounts

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strategic relationships

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multilayered sales strategy that seeks to create unique relationships with the best customers while streamlining a transaction-based relationship with others who demand less service

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strategic relationships EXAMPLE

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Shell Oil fount that some smaller buyers didn't want or have time for personal visits by salespeople so they reallocated personal sales efforts to lager accounts and began using only telemarketing to call on smaller accounts. They found that all customers were more satisfied, selling costs were reduced, sales increased, and profits soared

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sales effectiveness enhanced through technology

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The internet has the ability to inform, persuade and enhance the personal selling component makes it a critical part of sales management in the 21st century

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sales effectiveness enhanced through technology EXAMPLE

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Dell and Hewlett-Packard (HP) has primary strategies of direct selling and selling through retailers, both now experience strength in sales, customer satisfaction and loyalty that are greatly enhanced by their web presence

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Electronic data interchange (EDI) and efficient consumer response (ECR)

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Enable companies to tie their computers directly to their customers - when a customers computer recognizes a low inventory, it can generate an order directly to the vendors computer, which them schedules the product for delivery

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Traditional top-down bureaucratic style managers

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• Supervisors responsible for administering the sales force • Held directly accountable for the actions of their salespeople • Words like control and manage were used to describe their activities

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Modern managers

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• Work in a highly dynamic and competitive environment • Demands a more responsive, flexible approach to sales management • Sales forces are becoming less hierarchical with fewer layers of management • More responsibility is given to the sales person

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effective leadership of salespeople includes

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1. Communicating with salespeople rather than controlling them 2. Becoming a cheerleader and coach instead of a supervisor or a boss 3. Empowering salespeople to make decisions rather than directing them - Mentoring rather than directing salespeople

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globalization

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- view customers in their culture core values and appreciate it - understand their business practices - see each other honestly and from their prospective

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challenges of diversity

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Managers need to understand a wide range of environmental differences (cultural, legal, behavioral) in the selling process

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unethical behavior EXAMPLE

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US government has developed Federal Sentencing Guidelines that are designed to punish firms that allow salespeople to engage in unethical behavior -> Penalties are reduced for firms that have required ethics training and have adopted other polices that encourage ethical behavior

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ethics

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communication is key - Long term relationships and customer loyalty are impossible to maintain in an atmosphere of distrust brought on by unethical sales approaches

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sales management

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All activities, processes, and decisions involved in managing the sales function in an organization

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*sales management process

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1) the formulation of a sales program 2) the implementation of the sales program 3) the evaluation and control of the sales program

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formulation of a sales program

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- sales strategy - consider environmental factors - organize and plan companies personal selling efforts and integrate them with other elements of their marketing strategy

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implementation of the sales program

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- selecting the right sales personnel - designing and implementing approaches that will direct their efforts toward the desired objective

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evaluation and control of the sales program

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- developing methods for monitoring and evaluating sales force performance appropriately - allows for adjustments when performance is unsatisfactory

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external environmental factors

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something you cant control

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external environmental factors EXAMPLES

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o Demands of potential customers o Actions of competitors o Energy prices, technological advances, government regulations and social concerns

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internal (organizational) environmental factors

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factors within the company

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internal (organizational) environmental factors EXAMPLES

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o Human and financial resources o The firms production capacity o Research and development

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sales management: the environment

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external or internal

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sales management: marketing strategy

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marketing activities

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sales management: activities

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- account management policies - sales force organization - sales planning - deployment - supervision - selection, training, and motivating the sales force

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sales management: determinants of the salesperson's performance

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- salespersons view of the job requirements, role perceptions - personal characteristics

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sales management: outcomes

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performance

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sales management: control

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evaluation and control of sales force performance

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external factors impact success in selling

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1) environment can keep the company from pursuing certain marketing strategies or activities 2) environmental variable determine success or failure of marketing strategies 3) environmental changes can create new marketing opportunities 4) environmental variables are affected and changed by marketing activities

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1) environment can keep the company from pursuing certain marketing strategies or activities

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when the government declares the sale of a product to be illegal or when a well-enriched competitor makes it unattractive for the firm to enter a new market - drug commercials: pharmaceutical sales have been impacted because of a change in the legal/political environment

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2) environmental variable determine success or failure of marketing strategies

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the rapid growth in the number of women in the labor force in recent years helped ensure the success of lean cuisine and other quality brands of convenient frozen entrees

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3)environmental changes can create new marketing opportunities

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technology allows development of new products -> emergence of electronic commerce software enabled HP to develop solutions to problems such as security, design, and flow of data over the Internet

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4) environmental variables are affected and changed by marketing activities

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New products and promotional programs help change lifestyles and social values ->in view of increased activity by consumer groups, environmentalists, and other public interest groups and agencies, marketers today must consider how proposed programs will effect the environment and how the environment will effect the programs

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external environment variables

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o Economic (including competition) o Legal and political o Technological o Social and cultural (focused on ethics) o Natural

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economic environment EXAMPLES

answer

- GDP - disposable income - competition - distribution channels

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legal and political environment EXAMPLES

answer

- antitrust laws - consumer protection laws - equal employment opportunities

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natural environment EXAMPLES

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- resource availability - raw materials - weather

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social and cultural environment EXAMPLES

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- changing population demographics - cultural diversity - ethical values

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technological environment EXAMPLES

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- new product technologies - changing information - communication technologies

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economic environment

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• Total potential demand for a product within a given country depends on that country's economic conditions (amount of growth, unemployment rate, level of inflation)

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global economic conditions EXAMPLE

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companies as diverse as Intel or caterpillar have been adversely impacted at the bottom line in their European operations due to the unfavorable exchange rate between the US dollar and the euro

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the amount of competition in an industry

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Both the number of competing firms and their relative strengths in the marketplace

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ways to deal with competition

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salespeople - observe changes by competition first reprots - analyses of lost sales CRM software - gives a lot of information

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antitrust laws

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- Aimed primarily at preserving and enhancing competition among firms in an industry - Restrict marketing practices that would tend to reduce competition and give one firm a monopoly through unfair competition

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consumer protection laws EXAMPLES

answer

belt laws, consumer bill of rights, safe drinking water bands on plastics and chemicals, no call lists

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consumer protection laws

answer

- Set standards of quality and safety - Requires that consumers be provided with accurate information to use in making purchase decisions - prevent misrepresentation

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equal employment opportunities

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It is lawful to discriminate against a person in either hiring or promotion because of race, religion, nationality, sex or age

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equal employment opportunities EXAMPLES

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civil rights act 1964, women's right to work, but not for equal pay; equal pay act didn't start until the 70's

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technological environment

answer

New product technology lowers costs and makes us more efficient

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using technology to enhance business EXAMPLE

answer

By improving the processes of filling and storing tanks, blue rhino has begun to dominate a market that was largely populated by small, independent dealers

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social and cultural environments: ethics

answer

Firms develop new products in response to trends in consumer tastes and preferences

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demographic trends that affect selling

answer

- again society - Greater influx of minorities (as a % of total population) - Two-income households - Greater mobility - Desire for more leisure time - Desire for more convenience oriented products

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aging society

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america is getting older • Next generation is going to be smaller than ours • More older people than there are younger people • Economic downturn changes how many kids we have

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ethics

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- Concerned with the development of moral standards by which actions and situations can be judged - Actions that may result in actual or potential harm of some kind (economic, mental, physical) to an individual, group, or organization o More proactive than the law o Anticipate and avoid social problems

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avoid ethical dilemmas by:

answer

- written policies - clear guidelines - clearly communicate policies

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cultural diversity

answer

o Important to learn another language o Sales people have to be multilingual

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availability of raw materials

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The source of all the raw materials and energy resources needed to make, package, promote and distribute a product

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weather

answer

o Natural disasters such as tornadoes and floods can influence demand for building products o Unseasonable weather can damage or enhance sales, depending on the type of product

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demarketing

answer

not marketing part or all of a product line when resources are scarce

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natural resources

answer

owing social concern about the possible negative impacts of products and production processes on the natural environment

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failure to forecast changes in the environment

answer

Many companies do not use sophisticated techniques for environmental scanning and forecasting

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internal (organization) environment factors

answer

1. Goals, objectives and culture 2. Human resources 3. Financial resources 4. Production and supply chain capabilities 5. Service capabilities 6. Research and development and technological capabilities

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goals, objectives and culture

answer

Successful management of customer relationships begins with top management's specification of a company mission and objectives that create a customer-centric organization

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company culture

answer

o Mission statement o Styles of management o Personalities of executives

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human resources (personnel)

answer

Sales and situations are complex and dynamic o Ability to attract talent that has the capability to make sales in the market place o If you shrink the pool, you have less elite to chose from

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financial resources

answer

An organizations financial strength influences many aspects of its customer relationship initiatives

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lack of financial resources

answer

Can (1) constrain the firms ability to develop new value-adding products, (2) reduces our promotional budget and (3) limits the size of our sales force

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merging with a larger firm

answer

To obtain the financial resources necessary to realize their full potential in the marketplace

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Production and supply chain capabilities

answer

The organizations production capacity, the technology and equipment available in its plants, and even the location of tis production facilities can influence the relationship selling initiative

question

lack of capacity prevents

answer

o Expanding its product line o Moving into new geographic areas o Serving increased demand o Competitive product price caused by transportation costs

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can we meet the demands of the market? EXAMPLE

answer

action figures: successful before they were ready to be, didn't have enough that Christmas to meet demands

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where to produce

answer

o Most things are not produced in the US o Have to be able to export easily

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service capabilities

answer

• Delivering a high level of service quality is an important organizational capability - always servicing the account - If you do it right, customers are reluctant to switch, even because of price - strong competitive advantage

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Research & development, and technological capabilities

answer

An organizations technological and engineering expertise is a major factor in determining whether it will be an industry leader or follower in both the development of value-adding products and high-quality service delivery - A sales reps job is to overcome the rate of adoption, still has to be functional

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