Copyright 2006 by The McGraw-Hill Companies, Inc.

McGraw-Hill/Irwin
 Chapter 1

Overview of Sales Management

and the Selling Environment

McGraw-Hill/Irwin Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.
 Learning Objectives
Identify and discuss key trends affecting
sales organizations and sales managers
today
Present a general overview of the sales
management process
Identify and illustrate the key external and
internal environmental factors that
influence the development of marketing
strategies and sales programs

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 Sales Management in the 21st Century
Building long-term relationships with customers
Creating more nimble and adaptable sales
organizational structures
Removing functional barriers within the organization to
create greater job ownership and commitment from
salespeople
Shifting sales management style from commanding to
coaching
Leveraging available technology for sales success
Integrating salesperson performance evaluation to
incorporate all activities and outcomes

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 Key Themes

Innovation thinking outside the box

Technology broad spectrum of tools
available to salespersons
Leadership capability to make things
happen
Globalization
Ethics

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 Innovation
Classical selling involved . . .
Transaction Selling a series of transactions,
each one involving separate organizations
entering into an independent transaction.
The contemporary shift . . .
Relationship Selling narrowing the vendor
pool, improving efficiencies, working directly with
customers to solve problems. In general,
salespeople are asked build relationships.

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 Technology
Constant accessibility to people/data via
computers and mobile phones
Interactive web presences
Just-in-Time (JIT) delivery
Electronic Data Interchange (EDI) in manufacturing
Efficient Customer Response (ECR) in retailing
Customer Relationship Management Software
(CRM)
Intranets for internal communication
Extranets to serve all stakeholders

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 Leadership versus Managing
Leading (Mentoring) Managing
Communicate Control
Cheerleader/coach Supervisor/boss
Empower to make Direct
decisions

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 Globalization bridging the culture gap

1. View customers in terms of ethnic core

values
2. Get in sync with customer business
practices
3. Follow customers lead
4. See others honestly
5. Adopt the perspective of other cultures

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 Ethics
Customer loyalty is impossible to maintain
without trust
Long term relationships require higher
ethical standards
Federal Sentencing Guidelines designed
to punish unethical firms

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 Sales Management Process
The formulation of a sales program
The implementation of the sales program
The evaluation and control of the sales
program

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McGraw-Hill/Irwin 1-12 Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.
 Environmental Impact on Selling
Environmental forces constrain the ability to
pursue certain marketing strategies or activities
Environmental variables determine the ultimate
success or failure of marketing strategies
Changes in the environment create new
marketing opportunities
Environmental variables are affected by
marketing activities

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McGraw-Hill/Irwin 1-14 Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.
 Economic Environment
Buyer-seller interactions take place within
the context of current economic conditions
The economy impacts real potential
demand
Global economic conditions are important
Competitive structure affects selling
success

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 Legal-Political Environment
Many of the changes in societys values
reflect new laws and new government
regulations.
Three broad categories of laws are relevant:
Antitrust
Consumer Protection
Equal Employment Opportunity

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 Technological Environment
Changing the way salespeople and sales
managers do their jobs
Influences sales strategies
Provides increased opportunities for
product development
Transportation, communications, and data
processing technologies change sales
territories, sales rep deployment and sales
performance evaluation

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 Social and Cultural Environment
Ethics - concerned with development of moral
standards by which actions and situations can
be judged.
Of concern to sales managers:
Their relationships with salespeople
Interactions between salespeople and their customers
Managers must influence ethical performance by
example
Ethical standards reflect integrity of the firm

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 Natural Environment
Nature influences demand for products
Weather
Natural disasters
Availability of raw materials
Energy resources
Demarketing may result from shortages caused
by nature
Growing social concern about the possible
negative impact of product and production have
important implications for marketing and sales
programs

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McGraw-Hill/Irwin 1-20 Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.
 Goals/Objectives/Culture
Mission and objectives drive customer
management approaches
A well-defined mission + successful
corporate history + top management
values = strong corporate culture

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 Personnel
Modern sales organizations are highly
complex and dynamic
Often difficult to expand to take advantage
of growing markets
Utilizing outside specialists can help firms
meet need to expand

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 Financial Resources
Lack of financial resources can:
constrain ability to develop new products
limit promotional budget
limit size of sales force

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 Production and Supply Chain
Capabilities
Production capacity
Location of production facilities
Transportation costs
Ability to ensure seamless distribution and
service after the sale

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 Service Capabilities
Opportunity for strong competitive
advantage
Difficult for other firms to compete for
same customers
Customers reluctant to switch regardless
of price

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 R&D and Technological Capabilities
Excellence in design and engineering
provide major promotional appeal
Ability to communicate technological
sophistication as value-add helps prevent
over-reliance on price to get sales

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 Key Terms
transactional selling external environment
relationship selling economic environment
leading versus legal and political
managing environment
sales management technological environment
sales management process social and cultural
formulation environment
Implementation natural environment
evaluation and control ethics
internal (organizational) demarketing
environment
corporate culture
discontinuous change

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 Mark W. Johnston Greg W. Marshall
Rollins College Rollins College
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