CRAVENS

PIERCY

8/e
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
 13-2

Chapter Thirteen

Sales Force,
Internet, and
Direct Marketing
Strategies

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.

 13-3

SALES FORCE,
INTERNET, AND DIRECT
MARKETING
STRATEGIES

 Sales Force
Strategy
 Internet Strategy
 Direct Marketing
Strategies
 13-4

OFFICE DEPOT’S
SUCCESSFUL INTERNET
STRATEGY
 Using a seamless network, Web operations are
integrated into Office Depot’s existing
businesses.
 An easy-to-use electronic link is provided
between the
online store and internal networks.
 Purchasing authorizations and limits are
incorporated
into the system.
 Ease of use rather than technology is the key
priority
for improving the online network.
 Bonuses are offered to salespeople to
encourage
corporate customers to use online ordering.
 Sales applicants are tested concerning Internet
familiarity, and informed of the importance of
Office
Source: Charles Haddad, “Office Depot’s E-Diva,” Business Week e.biz, August 6, 2001,
Depot’s online initiatives during the hiring
EB22-EB24.

process.
 13-5

DESIGNING AND
IMPLEMENTING SALES
FORCE STRATEGY
A company’s sales force
strategy determines how
the organization will use
the personal selling
function to maintain
contact with customers and
develop the relationships
that management wants in
order to achieve marketing
and promotion objectives.
 13-6

Sales Force Strategy

Determine the
role of the sales
force in
promotion
strategy
Define the selling
process (how selling
will be accomplished)

Decide if and how

alternative sales channels
will be utilized

Design the sales

organization

Recruit, train, and manage

salespeople

Evaluate performance
and make adjustments
where necessary
 13-7

Challenges in Selling
and Sales
Management
Two sets of ethical dilemmas are of particular
concern to sales managers. The first set is
embedded in the manager’s dealings with the
salespeople. Ethical issues involved in
relationships between a sales manager and the
sales force include such things as fairness and
equal treatment of all social groups in hiring and
promotion, respect for the individual in
supervisory practices and training programs,
and fairness and integrity in the design of sales
territories, assignment of quotas, and
determination of compensation and incentive
rewards. Ethical issues pervade nearly all
aspects of sales force management.

The second set of ethical issues arises from the

interactions between salespeople and their
customers. These issues only indirectly involve
the sales manager because the manager cannot
always directly observe or control the actions of
every member of the sales force. But managers
have a responsibility to establish standards of
ethical
Source: behavior
Mark W. for
Johnston and Greg theirSales
W. Marshall, subordinates,
Force Management, 7 ed., Burr
th

Ridge, IL: McGraw-Hill/Irwin, 2003, 21.

communicate them clearly, and enforce them
 13-8

Business and
Marketing Strategy
Influences on Sales
Strategy
Business
Strategy
Promotio
Market
n
Target(s
Strategy
)
SALES Strategy

STRATEGY
Pricing Product
Strateg Strategy
y

Distribution
Strategy
 13-9

Escalating
customer
expectations
Marketing Intense
productivity global
crisis competitio
n

SALES FORCE
CHALLENGES

Mergers
and
Blurring of
acquisitio
industry
ns
boundaries
Technology
Advances
 13-10

Range of Personal
Selling Roles

Transactional
Selling

Feature/Benefi
t Selling

Solution
Selling

Value-Added
Selling
 13-11

DEFINING THE
SELLING PROCESS
Finding Prospects

Opening the
Relationship

Qualifying the
Prospect

Presenting the
Sales Message

Closing the
Sale

Source: Mark W. Johnston and Greg W. Marshall, Servicing

Sales Force Management, McGraw-Hill/Irwin, 2003,
51-56. the Account
 13-12

As radical change sweeps through

today’s marketplace, managers face
daunting questions about just how to
adapt. Most of those questions focus
on the structure and deployment of
sales forces: What is the right mix of
outside salespeople, inside reps,
independent reps, brokers,
telemarketers, and support staff? Are
sales reps even necessary? Or can
they be replaced by 800 numbers,
catalogs, shopping channels, or the
Internet?

James Champy, “Strategy Session,” SAMM, 1997, 32.

 13-13

The Selling Process

Guides

 Recruiting

 Training

 Effort Allocation
 Organizational
Design
 SellingSupport
Activities
 13-14

Selecting Sales
Channels to Value
Chain Members and
End Users
 Major Account
Management
 Field Sales Force
 Telemarketing
 Electronic/Mail Contact
 13-15

DESIGNING THE SALES

ORGANIZATION

Organizational
Structure

Deployment of
Selling Effort
 13-16

Sa les F orce
De plo yme nt
 Size of the Sales Force
 Allocation of Selling Effort

Sales person skills and effort

PLUS
Market potential
Number and location of
customers
Intensity of competition
Market (brand) position of
the company
 13-17

Alternative Designs
Customer needs
different

Market-Driven Product/ Market-

design Driven design

Simple Complex
product range of
offering products

Geography- Product-
Driven design Driven design

Customer needs
similar
 13-18

Selec tin g an
Orga nizatio na l
Desig n
 What is the selling job?
 How much customer/product
specialization is necessary?
 Role of value chain (channel)
relationships?
 How many sales management levels
(hierarchy versus process)?
 Will sales teams be used?
 Sales channels in addition to the field
sales force?
 Are there any sales structure danger
signals (high costs, turnover, large
sales variations across territory?
 13-19

Sales Force Size

Example Sales

40

35 Current
level

30 Maximum profit
contribution level
$ millions

25

20
Gross profit
contribution

15

10
Selling
expense
5

0
60 70 80 90 100 110
Number of salespeople
 13-20

MANAGING THE
SALES FORCE

 Findingand
Selecting
Salespeople
 Training/Developme
nt
 Management Control
Monitoring
Directing
Evaluating
Rewarding
 The Swiss Drug Maker
13-21

Novartis Strengthens
Sales Force Capabilities
Novartis’ 1999 sales growth was
very low compared to rivals’
double-digit sales increases. Top
management launched a major
turnaround strategy, spearheaded
by new product initiatives and
strengthening of provided
Salespeople were the sales force.
customer
research information to focus their
targeting
efforts.
 The size of the sales force was
increased
from 2,815 to 6,200 in 2002.
 Collaboration and persistence were
determined to be key traits of high
performance Novartis salespeople.
 Major efforts were initiated to upgrade
the August 23, 2002, A1 and A5.
Source: “New Prescription: It’s Rivals in Funk, Novartis Finds a Way to Thrive,” The Wall Street
Journal,

sales force and improve selling and

 13-22

SALES FORCE
EVALUATION AND
CONTROL
Performance
Measures

Performance
Standards

Activities Focus of Management

Control and/or Outcomes
 13-23

REINVENTING THE
SALES ORGANIZATION

Customer
A Relationships
Te pp
ch ly ing
no ing h
lo oac
gy C
SALES
Performance MANAGER Sales
Huddles CHALLENGES Structure
Re In
er la ter
om ls tio n
s t ne ns al
n
Cu ha Keeping hi
ps
C
Score
 13-24

INTERNET STRATEGY

 Strategy Development
 Internet Objectives
 E-Commerce Strategy
 Value Opportunities and
Risks
 Measuring
Effectiveness
 The Future of the
Internet
 13-25

Internet Strategy
Alternatives
Promotional
Medium

Communication
Tool

Value-Chain
Channel

Separate
Business Model
 13-26

Deciding Internet
Objectives

 Creating Awareness
and Interest
 Information
Dissemination
 Obtaining Research
Information
 Brand Building
 Improving Customer
Service
 13-27

DESIGNING THE
STRATEGY
1. Customer Groups
Targeted
2. Value Proposition
3. Communications
Strategy
4. Designing the Website
5. Structure of the
Organization
6. Alliance Partners
7. Shareholder Value
Source: J. F. Rayport and B. J. Jaworski, e-Commerce, McGraw-Hill/Irwin, 2003, 12.

8. Tracking Performance
 13-28

Measuring Internet
Effectiveness

Challenging but
capabilities are
developing.
What should be measured
and how?
Major changes are likely
through trial and error.
Alternative measures:
Ad impressions, clicks,
unique visitors, total
visits, page impressions
 13-29

DIRECT MARKETING

Kiosk
Shopping Catalogs

Electronic DIRECT
MARKETING Direct Mail
Shopping
METHODS

Radio/Magazine Telemarketing
/
Newspaper Television
 13-30

Adva ntag es of
Dire ct Mar ke ting
 Socio-economic Trends
Time constraints/
convenience
 Low Access Costs
Much lower than face-to-face
contact
 Data Base Management
Facilitates direct marketing
initiatives
 Value
An attractive bundle of value