1 2007 edition vitale, giglierano and pförtsch chapter 11 business-to-business selling: developing...
TRANSCRIPT
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2007 Edition
Vitale, Giglierano and Pförtsch
Chapter 11Business-to-Business Selling: Developing and Managing the Customer Relationship
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Both Sellers and Buyers Are “Boundary Personnel”
BoundaryPersonnelBoundaryPersonnel
Individuals in the organization who span the boundaries of their own organizations and those of customers.
Boundary personnel serve as the liaison withother key organizations – they can be a major
asset in the buyer-seller relationship.
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Business-to-Business Selling Characteristics
1. Repeated, ongoing relationships
2. Solution-oriented, total system effort
3. Long time period before selling effort pays off
4. Continuous adjustment of needs
5. Creativity in problem solving often demanded by buyer of seller
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1. Repeated, ongoing relationships
• The relationship between the seller and buying center members is a series of dyadic interactions– One-to-one meetings or interactions between
stakeholders in the buying center and the seller or other individuals in the selling organization’s value chain.
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2. Solution-oriented, total system effort
• Customers buy solutions, not technologies or core products.– The seller and the selling organization must
understand the needs of the customer.– The seller must also understand the different
motivating elements between members of the customer buying center.
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3. Long time period before selling effort pays off
• In business-to-business selling, the outcome of the sales effort may not be known for months (or years!)– It is important to use the development period
to reinforce the value offering relative to competitive offerings.
– Reduce buyer perceptions of risk by reinforcing the total value of the offering.
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4. Continuous adjustment of needs
• It is important to be flexible and responsive to the changing needs of customers.
• Customer needs evolve as they learn more about the sellers offering and how the offering can be applied to their needs.
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5. Creativity in problem solving often demanded by buyer of seller
• Customization of the offering to meet the specific needs of the buyer is expected, especially by large customers.
• Approaching each customer’s problem in such a way that the customer perceives the offering as unique is particularly advantageous.– Can relieve the seller of concerns relative to pricing
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What Constitutes a “Relationship” in Relationship Marketing?
DiscreteExchange
MultipleTransactions
Collaboration/Partnering
Differentiating an Undifferentiated
Product
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Philosophies of Marketing
ProductionEra
ProductionEra
Societal/Partnering/
Value NetworkEra
Societal/Partnering/
Value NetworkEra
SalesEraSalesEra
MarketingEra
MarketingEra
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Four Forms of Seller Roles
Order Taker
Persuader/Sustainer
Motivator/Problem Solver
Relationship/Value Creator
Primary role is taking orders and ensuring timely delivery of products.
Updates customers about offerings, attempts to convince customers of offering value.
Assists customers in maximizing product value by providing advice and customer education.
Creates a partnership with the buying center that stimulates customers. Often built by sales and marketing teams.
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Culture
Buying Center and Buying Patterns
Channels
Competitors
Markets and Customers
Products
Sellers must know and understand the customers’…
Technologies
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Other Types of Selling Roles
• Missionary Sellers/Field Marketers– Critical in finding new customers, new market
segments, and developing business within existing accounts.
• Post-Sale Customer Service– Effective customer service can reinforce the
purchase decision and create superior value for a customer.
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Organizational Relationship – Field Sales and Field Marketing
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Organizational buyers and sellers have
three needs to satisfy:
1. The needs of the job function
3. The individual needs of the buyer and seller.
2. The needs of the organization
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DirectSales Force
Field sellers directly employed by the supplier of the offering
Manufacturers’Representative
An independent businessperson who does not take title and usually represents several non-competing producers
DistributorsRepresents a manufacturer’s goods by taking ownership and providing local inventory
Selling Structure
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Top-Down and Bottom-Up Forecasts
Top-Down:The result of
researchefforts to forecastmarket
Potential, thenReducing it toSegments in
question
Bottom-Up:Begins withan analysis
of how muchproduct can be
sold to eachcustomer in a
particularterritory.
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Sales Force Compensation
StraightCommission
StraightCommission
CombinationPlans
CombinationPlans
StraightSalary
StraightSalary
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StraightCommission
StraightCommission
•Most appropriate where repeat efforts are necessary to sustain customer purchases.•Rewards are linked to short-term, repeated performance.•Sellers will likely concentrate on customers that have a patterns of frequent and substantial purchases.•Inappropriate during new product introductions.•May not work well for sophisticated products where missionary work is needed.•Compensation variability/volatility may create problems for the sellers.
Sales Force Compensation
Methods
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•Management is able to exercise greater control over the sales force (compared to straight commission).•Appropriate when personnel in selling roles are required to provide design and engineering assistance.•Motivator/problem solver and relationship/value creator roles are appropriate for straight salary compensation.•Creates stability of sales employees.•Does not tie financial rewards to sales results – may attract personnel who are security oriented instead of achievement oriented.
Sales Force Compensation
Methods
StraightSalaryStraightSalary
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CombinationPlan
CombinationPlan
•Most frequently used form of compensation.•Salary portion of compensation corresponds to management’s needs for the sales staff to perform administrative duties, while the commission portion encourages increased selling effort.•The commission portion of the compensation is paid as it is earned, as opposed to a bonus (most likely paid on a quarterly or annual basis).
Sales Force Compensation
Methods
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Manufacturers Representatives
Memo to reps:Reps are compensatedwhen the sale is culminated. In most instances, this occurs when the customer has paid the invoice.
When is a sale booked? Why are fixed costsimportant?
Memo to reps:Rep compensation isa variable cost. Reps cover the fixedcosts throughcommissions earned on all products represented. Addingmore related productshelps cover fixed costs.
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Direct Sales or Mfg. Representatives?
• Appropriate for direct sales force– Product is technically
complex– Control is important– Missionary work
needed to build relationships
– Concentrated customer base
– Explicit customer feedback desired
• Appropriate for mfg. representatives– Product is generic or
standardized– Control is less
important– Reps have other
complimentary lines– Market is dispersed
and matches rep’s existing call patterns
– Direct customer feedback is less critical