Sales Management Planning
Chapter 8
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Organizational Strategy Levels
Strategy Level
Corporate Strategy
Key Decision Areas
Corporate Mission SBU Definition SBU Objectives Corporate Growth Orientation Strategy Types Strategy Execution Target Market Selection Marketing Mix Development Integrated Mkt Communications Account Targeting Strategy Relationship Strategy Sales Channel Strategy
Key Decision Makers
Corporate Management
Business Strategy Marketing Strategy
SBU Management Marketing Management
Sales Strategy
Sales Management
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SBU Objectives and the Sales Organization
Market Share Objectives Build Sales Organization Objectives
Build sales volume Secure distribution
Primary Sales Tasks
Call on prospective
Recommended Compensation System
Salary plus incentive
Hold
Maintain sales
volume Consolidate market position Harvest
Reduce selling
costs Target profitable accounts
and new accounts Product/market feedback Call on targeted current accounts Increase service levels to current accounts Call on and service most profitable accounts only and eliminate unprofitable accounts Reduce inventories
Dump inventory Eliminate service
Salary plus commission or bonus
Salary plus bonus
Divest/Liquidate
Minimize selling
Salary
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costs and clear out inventory
Developing Growth Strategies
Product/ Market Expansion Grid
Existing Products Existing Markets New Markets 1. Market Penetration 2. Market Development New Products 3. Product Development 4. Diversification
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Product/ Market Expansion Grid
Market Penetration: making more sales to current
customers without changing its products
Add new stores in current market areas, improve advertising, prices, service or store design.
Market Development: develop new markets for its
current products
Identify new demographic or geographic markets.
Product Development: offering modified or new
products to current markets
New styles, flavors, colors, or modified products. Start up or buy new businesses.
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Diversification: new products for new markets
Corporate Growth Orientation and Sales Management Activities (Compaq Computer Example)
Corporate Growth Direction
Intensive Growth Internal Development Diversification Growth
Corporate Growth Method
Development of new Internet products, small business Development of new personal systems, and engineering computers for existing markets workstations
Acquisition
Investing in companies with Operating as a venture capitalist products to help existing and investing in companies businesses compete more with promising new products successfully and technologies
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Business Strategy and the Sales Function
Business Strategy Types
Porter’s Generic Business Strategies
Low Cost - focus on low cost Differentiation - focus on uniqueness Niche - focus on a particular target market and use a low cost or differentiation approach
Role of the Salesforce
Low Cost - sell to large customers; minimize costs; focus on price; order taking role Differentiation - sell non-price benefits; high customer service and responsiveness; target low price sensitive customers; order generator 7 Niche - low cost or differentiation approach
Personal Selling-Driven vs. Advertising-Driven
Personal Selling When Message Flexibility is Important When Message Timing is Important When Reaction Speed is Important When Message Credibility is Important When Trying to Close the Sale
When Low Cost per Contact is Important When Repetitive Contact is Important When Control of Message is Important When Audience is Large
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Advertising
What is ‘Sales Management Planning’?
It involves setting objectives and determining ways to achieve them. b) Sales planning is anticipating environmental developments and preparing to meet to capitalize on them. c) Sales planning is very crucial when introducing new products. Close cooperation between sales and production management is crucial to the successful launching of innovative products. d) Strategic plan outlines how resources will be allocated to market opportunities.
a)
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Planning Hierarchy
Corporate mission Strategic business plan (long-term plan for the overall resource allocation to market, which includes marketing, finance, HR, operations, production). Strategic marketing plan (long term plan for specific products and markets). Strategic sales plan (long range plan for sales activities). Tactical Sales Plans (short run plan for implementing sales strategy).
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Information for Sales Planning
Primary Data – new data gathered specifically for the project in hand Secondary Data – available data also gathered for some other purpose Other sources of information (e.g. MIS, MKIS, DSS) Sales Intelligence
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Sales Intelligence
Sales people are expected to provide information for sales
planning and management and there is growing need for better sales intelligence from the field.
Sales people possess vital information about the market that
can be used to develop sales forecasts and quotas, to assess new products, and to formulate marketing strategies.
Salespeople should be encouraged/motivated by the
management; they should be provided with incentives, training, and proper supervision to encourage them to provide relevant information.
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Contd..
Sales managers must also make sure that the marketing
intelligence process is a two-way communication. Once the data has been analyzed, it is essential that relevant facts are communicated back to the field force in order to improve their selling efficiency. market, his opinion may be biased or incomplete knowledge.
Although the sales person has thorough knowledge about the
For this reason sales manager must work with other staff
specialists to develop a procedure for incorporating information from the field into the marketing planning process. For such reasons other sources are also used, like:
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• •
• •
•
Secondary data (which provides insight about the market conditions and competitors) Internal sales data (which allows managers to trace the histories of individual accounts, products, territories, and seasons) Product life cycle patterns Fluctuations, growth and decline of specific customers or customer groups (This information can be used to detect changes into different areas and at different times throughout the year) marketing research team
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Sales Management Planning Process
• • • •
• •
Analysis – examines what happens in the past, look at the present situation, SWOT analysis, trend analysis. Goal setting phase – set the direction for the sales force Sales strategies – translate the goals into action Tactical plans – more specific action plans, specific detailed outlines, assignment of responsibilities /deadlines Implementation stage – plan is executed here Control stage – serves to compare actual outcomes with planned results, in order to examine any plan revisions for the future.
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