©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 0 in Chapter 17 Chapter 17 Managing the Sales Force PowerPoint by Karen E. James Louisiana State University - Shreveport

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 1 in Chapter 17 Objectives  Review the types of decisions firms face in designing a sales force.  Learn how companies recruit, select, train, supervise, motivate, and evaluate a sales force.  Understand how salespeople improve their selling, negotiation, and relationship-building skills.

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 2 in Chapter 17 Designing the Sales Force Types of Sales Representatives Solution vender Demand creator Technician Missionary Order taker Deliverer

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 3 in Chapter 17 Designing the Sales Force Figure 17-1: Designing a Sales Force

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 4 in Chapter 17 Designing the Sales Force Steps in Process  Objectives and strategy  Structure  Sales force size  Compensation  Objectives –Sales volume and profitability –Customer satisfaction  Strategy –Account manager  Type of sales force –Direct (company) or contractual

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 5 in Chapter 17 Designing the Sales Force Steps in Process  Objectives and strategy  Structure  Sales force size  Compensation  Types of sales force structures: –Territorial –Product –Market –Complex  Key accounts

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 6 in Chapter 17 Discussion Scenario Ariel Jones has tremendously increased the number of accounts and the dollar value of sales within her territory. She’s so busy servicing existing accounts that she has little time to seek new business. Management has decided to “split” her territory by giving 50% of her existing client base to a new sales rep. What are the pros and cons of this strategy? Can it be implemented in a manner that minimizes potential negative consequences?

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 7 in Chapter 17 Designing the Sales Force Steps in Process  Objectives and strategy  Structure  Sales force size  Compensation  Workload approach: –Group customers by volume –Establish call frequencies –Calculate total yearly sales call workload –Calculate average number of calls/year –Calculate number of sales representatives

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 8 in Chapter 17 Designing the Sales Force Steps in Process  Objectives and strategy  Structure  Sales force size  Compensation  Four components of compensation: –Fixed amount –Variable amount –Expense allowances –Benefits  Compensation plans –Straight salary –Straight commission –Combination

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 9 in Chapter 17 Designing the Sales Force Figure 17-2: Managing the Sales Force

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 10 in Chapter 17 Managing the Sales Force  Recruiting begins with the development of selection criteria –Customer desired traits –Traits common to successful sales representatives  Selection criteria are publicized  Various selection procedures are used to evaluate candidates

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 11 in Chapter 17 Managing the Sales Force Personality testing is one method of screening candidates.

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 12 in Chapter 17 Managing the Sales Force Typical Training Topics Sales presentation techniques Company background and products Company characteristics Procedures and responsibilities Competitors’ products TrainingTopics

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 13 in Chapter 17 Managing the Sales Force Many firms specialize in sales force training.

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 14 in Chapter 17 Managing the Sales Force  The amount of time needed and the training method used vary with the level of task complexity.  Successful firms have procedures to aid in evaluating the sales force: –Norms for customer calls –Norms for prospect calls –Using sales time efficiently

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 15 in Chapter 17 Managing the Sales Force Greater emphasis on phone and Internet usage Greater reliance on inside sales force Time-and-duty analysis Configurator software Using Sales Time Efficiently

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 16 in Chapter 17 Managing the Sales Force Configuator software packages assist in complex pricing tasks.

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 17 in Chapter 17 Managing the Sales Force  Motivating the Sales Force –Most valued rewards Pay, promotion, personal growth, sense of accomplishment –Least valued rewards Liking and respect, security, recognition –Sales quotas as motivation tools –Supplementary motivators

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 18 in Chapter 17 Managing the Sales Force  Evaluating the Sales Force –Various sources of information may be used –Types of formal evaluation include: Performance comparisons Knowledge assessments

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 19 in Chapter 17 Managing the Sales Force Sources of Information When Evaluating the Sales Force Call Reports Customer Surveys Other Sales Representatives Personal Observation Customer Letters/Complaints

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 20 in Chapter 17 Personal Selling Principles Figure 17-3: Managing the Sales Force: Improving Effectiveness

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 21 in Chapter 17 Personal Selling Principles Major Aspects  Sales professionalism  Negotiation  Relationship marketing  Sales-oriented approach –Stresses high pressure techniques  Customer-oriented approach –Stresses customer problem solving  Steps in industrial selling process

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 22 in Chapter 17 Personal Selling Principles Figure 17-4: Major Steps in Effective Selling

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 23 in Chapter 17 Personal Selling Principles Major Aspects  Sales professionalism  Negotiation  Relationship marketing  Reps need skills for effective negotiation  Negotiation is useful when certain factors characterize the sale  Negotiation strategy –Principled –BATNA

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 24 in Chapter 17 Personal Selling Principles Major Aspects  Sales professionalism  Negotiation  Relationship marketing  Building long-term supplier-customer relationships has grown in importance  Companies are shifting focus away from transaction marketing to relationship marketing

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 25 in Chapter 17 Discussion Scenario Salespeople who meet or exceed their assigned quotas are typically given higher quotas the following year. How might this practice impact a company’s 1) internal marketing efforts with employees, and 2) relationship marketing efforts with external customers?