chapter 1 introduction to sales management and its evolving roles powerpoint presentation prepared...

Chapter 1

Introduction to Sales Management

and Its Evolving Roles

PowerPoint presentation prepared byDr. Rajiv Mehta

New Jersey Institute of Technology

Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved. 1 | 2

Chapter Outline

• What Is Sales Management?

• Types, Titles, and Hierarchical Levels of Sales Managers

• Responsibilities and Duties of Sales Managers

• Expanding Roles of Sales Managers

• What Qualities Are Needed to Be a Sales Manager?

Source: Flying Colours Ltd.


Chapter Outline

• Integrating Sales Management and Marketing Management

• Monitoring and Adapting to the Macroenvironment

• How Well Are Sales Managers Performing?

• Developing Sales Managers for the New Millennium



Learning Objectives

After reading this chapter, you should be able to do the following:1. Summarize the basic responsibilities and evolving roles of

sales management.2. Demonstrate how sales managers can better integrate

their roles with marketing management.3. Identify and prepare for megatrends that will affect your

future in sales management.4. Evaluate the selection criteria for sales management and

compare them to your present and potential qualifications.5. Analyze how the sales manager’s job is expanding and

what it will mean for your career.


What Is Sales Management?

• Few jobs are more crucial to the ultimate success of a business than sales management.

• Sales management shapes and determines nearly all the firm’s interactions with customers.

• Sales managers oversee the sales force—the direct income producers who determine the financial health of their organizations.


Types, Titles, and HierarchicalLevels of Sales Managers

V.P.sales

V.P.sales

National

sales manager

National

sales manager

Zone, division, or regional sales manager

Zone, division, or regional sales manager

District, branch, or

field sales manager

District, branch, or

field sales manager

Sales supervisorSales supervisor


Hiring Sales Managers/Leaders

• To see a video on hiring sales managers/leaders, go to– http://www.sellingpower.com/video/index.asp?

date=11/8/2006

• To read the “Top Tips for the Newly Appointed Sales Manager,” go to – http://www.cmctraining.org/articles_view.asp?

sid=0&article_id=25


Responsibilities and Dutiesof Sales Managers

• Sales managers plan, lead, and control the selling activities of their organizations.

• They continuously monitor and adjust their marketing strategies to dynamic technological, competitive, economic, legal, and cultural factors.

• Sales managers also consider the interests of the company's stakeholders, such as these:– employees– suppliers– financial community– media– stockholders– special interest groups– governments


Figure 1.1: Responsibilities and Duties of Sales Managers: A Conceptual Framework


Twenty-First CenturySales Force Management

• Chapters 1–4 will help you understand the following:– Introduction to Sales Management and Its Evolving

Roles (chapter 1) – Managing Ethics in a Sales Environment (chapter 2)– Customer Relationship Management and Building

Partnerships (chapter 3)– The Selling Process (chapter 4)


The Definition of Selling

• To see a video on the definition of selling and the role of the sales manager in managing the sales management function, go to– http://www.sellingpower.com/video/index.asp?

date=12/15/2006


Sales Forecasting and Budgeting

• Sales Forecasting and Budgeting (chapter 5) shows how sales managers accomplish the following: – estimate market potential for their

industry – estimate sales potential for their

company– develop a final sales forecast

• Sales managers employ these skills:– quantitative sales forecasting approaches– qualitative sales forecasting approaches

• A sales budget is a financial plan of expenditures needed to accomplish the organization’s goals and objectives.


Sales Force Planning and Organizing

• Sales Force Planning and Organizing (chapter 6) provides guidelines and direction for most other sales decisions and activities.

• Sales managers need to do the following:– set sales goals and objectives– establish sales policies and procedures– devise sales force strategies and tactics– implement controls

• Sales managers must determine these things:– the optimal number of salespeople to hire– the best way to structure the sales force

(geographically, by product, by customer type, or by some combination of these factors)



Time and Territory Management

• Time and Territory Management (chapter 7) helps sales managers determine which accounts their salespeople should call on, when, and how often.

• Sales managers must dothe following:– design sales territories – decide individual sales quotas – design a formal routing pattern

for salespeople to follow in calling on customers


Recruiting andSelecting the Sales Force

• Recruiting and Selecting the Sales Force (chapter 8) deals with sales managers taking these actions:– identifying sources of potential

sales recruits– devising a system for

measuring candidates against predetermined job requirements using numerous tools and techniques

– deciding whether to select or reject each applicant

Source: Stockbyte


Training the Sales Force

• Training the Sales Force (chapter 9) deals with designing programs to train salespeople.

• Sales managers must answer several questions:– Who should receive the

training?– Who should do the training?– Where, when, and how

should the training be accomplished?

– What should be taught?

Source: Stockbyte


Sales Force Leadership

• Sales Force Leadership (chapter 10) is the emotional process of exercising psychological, social, and inspirational influence on individual salespeople and the sales force collectively toward the achievement of organizational objectives, goals, and values.

• Several different theories, concepts, and approaches to effective sales force leadership are explored.



Sales Force Motivation

• Sales Force Motivation (chapter 11) deals with the set of dynamic interpersonal processes that stimulate the initiation, direction, intensity, and persistence of work-related behaviors of salespeople toward attaining organizational goals and objectives.

• Three types of theories that can be used to motivate the sales force:– content theories of motivation– process theories of motivation– reinforcement oriented theories of

motivation

Source: Triangle Images


Sales Force Compensation

• Sales Force Compensation (chapter 12) deals with all monetary payments and benefits used to remunerate and influence the performance of salespeople.

• Most companies use three main methods:– straight salary—a fixed amount of

money at fixed intervals, such as weekly or monthly

– straight commission—an amount that varies with results, usually sales or profits

– combination—a mix of salary and commission

Source: PhotoLink


Sales Volume, Costs,and Profitability Analysis

• Sales Volume, Costs, and Profitability Analysis (chapter 13) is essential to assure the organization’s bottom‑line goal of improving profitability.

• Sales managers need to analyze sales volume, costs, and profit relationships by product lines, territories, customers, and salespersons as well as across sales and marketing functions.



Sales Force Performance Evaluation

• Sales Force Performance Evaluation (chapter 14) must be measured and evaluated to determine commissions and bonuses for salespeople and to make promotion decisions.

• Performance evaluation is used to do the following:– improve sales force

productivity– take corrective actions to

improve organizational profitability and performance



Changing with the Times

ProductstrategyProductstrategy

Promotionstrategy

Promotionstrategy

Placestrategy

Placestrategy

PricingStrategy Pricing

Strategy

TargetmarketTargetmarket

marketing largely viewed from the seller perspective

marketing largely viewed from the seller perspective

emphasis on management of the marketing mix

emphasis on management of the marketing mix

satisfaction of individual and organizational objectives

satisfaction of individual and organizational objectives

marketing’s role primarily to create exchanges

marketing’s role primarily to create exchanges

Old Marketing PerspectiveOld Marketing Perspective


A Formal Definition of Marketing

• Marketing is moving from a transaction orientation to a customer relationship building orientation.

• New AMA definition shifts the perspective more to the customer side by focusing on delivering value and managing customer relationships.

The new official definition of marketing approved by the AMA in 2004 appears below.

“Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”

“Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”


Changing with the Times

focuses on delivering value to customers

focuses on delivering value to customers

ProductstrategyProductstrategy

Promotionstrategy

Promotionstrategy

Placestrategy

Placestrategy

PricingstrategyPricingstrategy

TargetmarketTargetmarket

focuses on managing customer relationships

focuses on managing customer relationships

moved away from a transaction orientation

moved away from a transaction orientation

focuses on building long-term customer relationships

focuses on building long-term customer relationships

New Marketing Perspective New Marketing Perspective


Expanding Roles of Sales Managers

3.Manage the hybrid

sales force

3.Manage the hybrid

sales force

2. Serve as customer

consultants

2. Serve as customer

consultants

1. Manage customer

relationships

1. Manage customer

relationships

What sales managers must do

What sales managers must do

Based on the new marketing definition, there are three major implications for sales managers:

• achieve a continuing dialogue with customers,

• personalize treatment of valued customers,

• increase customer retention.

• achieve a continuing dialogue with customers,

• personalize treatment of valued customers,

• increase customer retention.

work with

• telesalespeople,

• telemarketers,

• e-commerce salespeople,

• direct mailers,

• manufacturers’ agents.

work with

• telesalespeople,

• telemarketers,

• e-commerce salespeople,

• direct mailers,

• manufacturers’ agents.

• build ongoing relationships and mutually profitable partnerships with customers,

• encourage salespeople to go beyond selling and serve as consultants and partners.

• build ongoing relationships and mutually profitable partnerships with customers,

• encourage salespeople to go beyond selling and serve as consultants and partners.


What Qualities Are Neededto Be a Sales Manager?

6. Improve sales force

productivity and profitability

6. Improve sales force

productivity and profitability

5.Monitor competitive

offerings

5.Monitor competitive

offerings

4.Provide outstanding

communication

4.Provide outstanding

communication

3.Solve problems

creatively

3.Solve problems

creatively

2. Make good decisions

2. Make good decisions

1. Effectively lead and

motivate people

1. Effectively lead and

motivate people

What a good sales manager can do

What a good sales manager can do


The Field Sales Force and Headquarters Marketing Support Team

6. Marketing research

6. Marketing research

5.Product publicity

5.Product publicity

4.Trade shows

4.Trade shows

3.Sales aids

3.Sales aids

2. Sales promotion

2. Sales promotion

1. Advertising

1. Advertising

How H.Q. supports the sales force



The Field Sales Force and Headquarters Marketing Support Team

12. Internet

communications

12. Internet

communications

11.Public relations

11.Public relations

10.Market development

10.Market development

9.Product planning and

development

9.Product planning and

development

8. Forecasting

8. Forecasting

7. Marketing and sales planning

7. Marketing and sales planning




Aligning Sales with Marketing

• To see an excellent video on aligning sales with marketing, go to– http://www.sellingpower.com/video/index.asp?

date=11/29/2007


What Marketing Can Learn from Sales

• To learn about what marketing can learn from the sales department, go to– http://www.sellingpower.com/video/index.asp?

date=11/28/2007


Megatrends AffectingSales Management

Sales managers must adapt to three major megatrends to enhance their effectiveness and efficiency:

1. behavioral forces1. behavioral forces

2. technological forces2. technological forces

3. managerial forces3. managerial forces

Source: Flying Colours Ltd


Behavioral Megatrends Affecting Sales Management

• Buyers’ attitudes, preferences, and behaviors are changing, necessitating modification of selling strategies and approaches.

• more expert and demanding buyers• rising customer expectations • micro-segmentation of domestic markets • expanding power of giant retailers • empowerment of customers• globalization of markets

1. Behavioral Forces 1. Behavioral Forces


• Today’s successful sales managers are those who can make skillful and efficient use of technology to increase their efficiency and productivity in serving customers.

Technological Megatrends Affecting Sales Management

These include:

• sales force automation• virtual sales offices

(home, automobile, or virtually anywhere)

• electronic commerce

2. Technological Forces 2. Technological Forces

Source: Digital Vision



Sales Force AutomationSales Force Automation

Virtual Sales OfficesVirtual Sales Offices Electronic CommerceElectronic Commerce

• portable computers• electronic data interchange• videoconferencing• multifunction cell phones and

satellite pagers• voice mail and e-mail• instant messaging

• Home• Office• Virtually anywhere

• Internet:• blogs, podcasting• screen-sharing, WebEx

• Intranet• Extranet

Source: Digital Vision


The Use of Technology (Part 1)

• To see a video on the effective use of technology for generating leads to sell, go to– http://www.sellingpower.com/video/index.asp?

date=10/20/2006


The Use of Technology (Part 2)

• To see a video on the effective use of technology for identifying prospects to sell, go to– http://www.sellingpower.com/video/index.asp?

date=10/23/2006


Using Technology to Sell Better

• Salespeople can enhance their productivity by using telecommunication tools– Intranets– Extranets– Computers– Fax machines– Pages– Cell phones



Using Technology to Sell Better

• For an interesting article on technology-enabled selling, see – http://www.computerworld.com/news/1998/story/

0,11280,43417,00.html • For an interesting article on how technology can build

profitable relationships and deliver increased returns, see – http://www.infinityinfo.com/IndustriesTechnology.aspx

• Examples of technologies that salespeople are using include– http://www.cingular.com/blackberry8700c_consumer – http://web.palm.com/promos/treo700w_microsoft.jhtml?cid=ms3– http://www.pcworld.com/reviews/article/0,aid,123867,00.asp


Mobile virtual sales offices


• portable computers (notebook, handheld, and pocket PCs)

• electronic data interchange• videoconferencing (via desktop, laptop, or handheld computers)• multi-function cell phones and satellite pagers

• voice mail, e-mail, and instant messaging

• portable computers (notebook, handheld, and pocket PCs)

• electronic data interchange• videoconferencing (via desktop, laptop, or handheld computers)• multi-function cell phones and satellite pagers

• voice mail, e-mail, and instant messaging

Sales force automation

• Internet -- blogs -- podcasting -- screen-sharing -- WebEx

• Extranets• Intranets

• Internet -- blogs -- podcasting -- screen-sharing -- WebEx

• Extranets• Intranets

Technologicalmegatrends

affectingsales

management

Technologicalmegatrends

affectingsales

management

Electronic commerce



Managerial Megatrends Affecting Sales Management

• efforts to reduce selling costs

• shift to direct marketing alternatives

• certification of salespeople• shortage of business-to-

business salespeople• developments in

information management

3. Managerial Forces3. Managerial Forces

Source: Flying Colours Ltd


• direct mail (catalogs, brochures, and sales letters)

• telemarketing• teleselling• personalized e-

mail• kiosks• facsimile

• direct mail (catalogs, brochures, and sales letters)

• telemarketing• teleselling• personalized e-

mail• kiosks• facsimile

Shift to direct-marketing

alternatives

• database marketing

• data warehousing• data mining• push technology

• database marketing

• data warehousing• data mining• push technology

Managerial megatrends

affectingsales

management

Managerial megatrends

affectingsales

management

Developments in Information

Management

Selling cost

reduction efforts Selling cost

reduction efforts



Professionalcertification

of salespeople

Professionalcertification

of salespeople




Efforts to Reduce Selling CostsEfforts to Reduce Selling Costs• Median cost of a business-to-business sales call is more

than $250 (varies widely by industry and company).• For some large industrial companies, a sales call can

cost $400 to $1,000 or more because of the unusual complexity of both the selling process and the product itself.

• To reduce selling costs, many manufacturers and service providers are aggressively seeking alternatives to large national sales forces (for example, use of middlemen, part-time salespeople, and direct-marketing efforts).



• To sell to organizational buyers, several direct marketing alternatives support or bypass field salespeople:

1. direct mail 2. forms of telemarketing

– teleselling– kiosks (or computer

salespeople) – facsimile– personalized e-mail

Shift to Direct Marketing AlternativesShift to Direct Marketing Alternatives

Source: © Mark Karrass/Corbis



• Because of the public’s negativism toward selling, efforts have been directed at certifying sales personnel.

• Certification usually requires that a salesperson do these things:– gains a certain amount of practical

experience– enrolls in educational seminars and

courses– passes a sales competency exam– provides some professional

references– agrees to comply with a code of

conduct

Certification of SalespeopleCertification of Salespeople

Source: © Mark Karrass/Corbis


Certification of Salespeople

• For an interesting article on certification of salespeople, see– http://www.trainingmag.com/training/headlines/

article_display.jsp?vnu_content_id=1001996079 • Salespeople can attend professional certification

programs offered by firms such as– http://www.davekahle.com/certification.htm


Information Management Tools

• Sales managers and salespeople can adapt to megatrends using various information management tools.

• The four key trends in the management of information include these:(1) database marketing (2) data warehousing (3) push technology(4) data mining



1. Database marketing: A database is a large computerized file of customers’ and potential customers’ profiles and purchase patterns.

1. Database marketing: A database is a large computerized file of customers’ and potential customers’ profiles and purchase patterns.

2. Data warehousing: A data warehouse is a very large, corporate-wide database, built with data from a number of information systems already in place in the company.

2. Data warehousing: A data warehouse is a very large, corporate-wide database, built with data from a number of information systems already in place in the company.

3. Push technology: Push technology is the latest iteration of e-mail combined with data warehousing to discern what your customers need and exactly when they need it.

3. Push technology: Push technology is the latest iteration of e-mail combined with data warehousing to discern what your customers need and exactly when they need it.

4. Data mining: Data mining is the process of using statistical analysis to detect relevant patterns or relationships between and among variables in a database.

4. Data mining: Data mining is the process of using statistical analysis to detect relevant patterns or relationships between and among variables in a database.



Database marketingDatabase

marketing

Data warehousing

Data warehousing

Data miningData

mining

Push technology

Push technology

Information management

trends

Information management

trends

A database is a large computerized file of customers’ and potential customers’ profiles and purchase patterns.

A database is a large computerized file of customers’ and potential customers’ profiles and purchase patterns.

Push technology is the latest iteration of e-mail combined with data warehousing to discern what your customers need and exactly when they need it.

Push technology is the latest iteration of e-mail combined with data warehousing to discern what your customers need and exactly when they need it.

Data mining refers to the process of using statistical analysis to detect relevant patterns or relationships between and among variables in a database.

Data mining refers to the process of using statistical analysis to detect relevant patterns or relationships between and among variables in a database.

A data warehouse is a very large, corporate-wide database, built with data from a number of information systems already in place in the company.

A data warehouse is a very large, corporate-wide database, built with data from a number of information systems already in place in the company.


How Well AreSales Managers Performing?

• Some major reasons why some sales managers may fail to perform at higher levels are these:– illogical selection of sales

managers– inadequate sales management

training– lack of a long-run customer

relationship orientation– insufficient blending of sales,

marketing, and financial knowledge


Sales Management Hierarchy: Skill and Ability Requirements

Interpersonal Skills

Developing Leadership Ability

Salesperson

Sales supervisor

District sales

manager

Regionalsales

manager

National sales

manager

Vice presidentof sales

Selling ability

Supervisoryability

Managerialability

Administrative and leadership ability


Developing Sales Managersfor the New Millennium

• To succeed in the years ahead, sales managers will need to focus on the following:– developing closer relationships

with customers– treating salespeople as newly

empowered equals – applying flexible motivational

skills in working with a multicultural, hybrid sales force

– keeping up-to-date on the latest technologies

– learning marketing and financial skills in order to recommend competitive strategies

– continually seeking ways to exceed customer expectations


Ethical Situation: What Would You Do?

On a sales call on one of your company’s best customers, the purchasing agent smilingly tells your salesperson: “I had a special arrangement with the salesperson who used to call on me from your company. Every time I placed an order, the sales manager arranged a special gift for me. Are you going to continue that policy?”

chapter 1 introduction to sales management and its evolving roles powerpoint presentation prepared...

Documents

roles of sales managers

sales managers job

sales management shapes

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