I n t e r n a t i o n a l M a r k e t i n g I n t e r n a t i o n a l M a r k e t i n g

Personal Selling and

Sales Management

Chapter 17

1 4 t h E d i t i o nP h i l i p R. C a t e o r a

M a r y C. G i l l yJ o h n L . G r a h a m

McGraw-Hill/IrwinInternational Marketing 14/e

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

17-2

What Should You Learn?What Should You Learn?

• The role of interpersonal selling in international marketing

• The considerations in designing an international sales force

• The steps to recruiting three types of international sales people

• Selection criteria for international sales and marketing positions

17-3

What Should You Learn?What Should You Learn?

• The special training needs of international personnel

• Motivation techniques for international sales representatives

• How to design compensation systems for an international sales force

• How to prepare Americans for foreign assignments

• The changing profile of the global sales and marketing manager

17-4

Global PerspectiveInternational Assignments are Glamorous, Right?

Global PerspectiveInternational Assignments are Glamorous, Right?

• Job security

• Adjustment to other cultures

• Readjustment upon return to U.S.

• Will an international assignment really help your career?

17-5

Designing the Sales ForceDesigning the Sales Force

• Relationship marketing and customer relationship management

• Decisions must be made regarding the numbers, characteristics, and assignments of sales personnel

• Different market requirements regarding direct sales and customer approach

• Territory allocation

• Customer call plans

17-6

Recruiting Marketing and Sales PersonnelRecruiting Marketing and Sales Personnel

• The largest personnel requirement abroad for most companies is the sales force

• Expatriates

– Numbers are declining– Important for highly technical or involved products– High cost– Cultural and legal barriers– Limited number of high-caliber personnel willing to live abroad

• Virtual expatriates

– Manage operations in other countries but don’t live there

17-7

Recruiting Marketing and Sales Personnel Recruiting Marketing and Sales Personnel

• Local nationals

– Transcend both cultural and legal barriers– Familiar with distribution systems and referral networks– Headquarters personnel may ignore their advice– Lack of availability– Sales positions viewed negatively

• Third-country nationals

– Expatriates working for a foreign company

• Host-country nationals

– Work restrictions

17-8

The 20 Most Expensive Cities to Live on the Planet (in order)

The 20 Most Expensive Cities to Live on the Planet (in order)

Exhibit 17.1

17-9

Selecting Sales and Marketing Personnel

Selecting Sales and Marketing Personnel

• Management must define precisely what is expected of people

• Prime requisites– Maturity– Emotional stability– Breadth of knowledge– Positive outlook– Flexibility– Cultural empathy– Energetic and enjoy travel

• Mistakes can be costly• A manager’s culture affects personnel decisions

17-10

Training for International MarketingTraining for International Marketing

• The nature of the training program depends on:

– The home culture of the sales person– The culture of the business system and foreign market

• Continual training is important in foreign markets

• Companies should provide home-office personnel with cross-cultural training

• The Internet now makes some kinds of sales training much more efficient

17-11

Personal Selling Tipsfrom Brussels to Bangkok

Personal Selling Tipsfrom Brussels to Bangkok

Exhibit 17.2

17-12

Motivating Sales PersonnelMotivating Sales Personnel

• National differences must always be considered when motivating the marketing force

• Individual incentives that work effectively in the U.S. can fail completely in other cultures

• Communications are important in maintaining high levels of motivation

• A company needs to make clear the opportunities for growth within the firm

17-13

Salespeople’s Distribution of 100 Points among Rewards in Terms of Their Importance

Salespeople’s Distribution of 100 Points among Rewards in Terms of Their Importance

Exhibit 17.3

17-14

Designing Compensation Systems for Expatriates

Designing Compensation Systems for Expatriates

• Fringe benefits

• Compensations comparisons between the home office and abroad

• Short-term assignment compensation

• Using a compensation program to recruit, develop, motivate, or retain personnel

17-15

Global Similarity to U.S. Compensations Plans

Global Similarity to U.S. Compensations Plans

Exhibit 17.4

17-16

A Compensation Blueprint How IBM Pays 140,000 Sales Executives Worldwide

A Compensation Blueprint How IBM Pays 140,000 Sales Executives Worldwide

Exhibit 17.5

17-17

Designing Compensation Systems for a Global Sales Force

Designing Compensation Systems for a Global Sales Force

• Involve representatives from key countries

• Allow local managers to decide the mix between base and incentive pay

• Use consistent performance measures (results paid for) and emphasis on each measure

• Allow local countries flexibility in implementations

• Use consistent communication and training themes worldwide

17-18

Designing Compensation Systems for a Global Sales Force

Designing Compensation Systems for a Global Sales Force

• Don’t design the plan centrally and dictate to local offices

• Don’t create a similar framework for jobs with different responsibilities

• Don’t require consistency on every performance measure within the incentive plan

• Don’t assume cultural differences can be managed through the incentive plan

• Don’t proceed without the support of senior sales executives worldwide

17-19

Evaluating and Controlling Sales Representatives

Evaluating and Controlling Sales Representatives

• In the U.S., emphasis is placed on individual performance– Which can easily be measured by sales revenues generated

• In many countries evaluation is more complex– Where teamwork is favored over individual effort

• In U.S.– Primary control tool used by sales managers is the incentive

system

• In other countries– Corporate control and frequent interactions with peers and

supervisors are the means of motivation and control

17-20

Preparing U.S. Personnel for Foreign Assignments

Preparing U.S. Personnel for Foreign Assignments

• Cost of foreign assignments

– Typically from 150-400 percent of the annual base salary– Cost increases if the expatriate returns home before completing

the scheduled assignment

• The planning process

– Must begin prior to the selection of those going abroad – Must extend to their specific assignments after returning home

17-21

Overcoming Reluctance to Accept a Foreign Assignment

Overcoming Reluctance to Accept a Foreign Assignment• Concerns for career

– An absence will adversely affect opportunities for advancement

• Concerns for family

– Education of the children– Isolation from family and friends– Proper health care– The potential for violence

• Special compensations packages deal with concerns

17-22

Reducing the Rate of Early ReturnsReducing the Rate of Early Returns

• Evaluation of an employee’s family

– 75 percent of families sent abroad experience adjustment problems with children or marital discord

• Cross-cultural training for families as well as the employee

• Local ombudsmen

17-23

Successful Expatriate RepatriationSuccessful Expatriate Repatriation

• Commit to reassigning expatriates to meaningful positions

• Create a mentor program

• Offer a written job guarantee stating what company is obligated to do for returning expatriate

• Keep the expatriate in touch with headquarters through periodic briefings and headquarter visits

• Prepare the expatriate and family for repatriation once a return date is set

17-24

Developing Cultural AwarenessDeveloping Cultural Awareness

• Expatriate failures

– Caused by lack of an understanding of cultural differences and their effect on management skills

• Cultural skills

– Can be learned and developed– Provide the individual with the ability to relate to a different

culture even when the individual is unfamiliar with the details of that particular culture

17-25

The Changing Profile of the Global ManagerThe Changing Profile of the Global Manager

• Fewer companies today limit their search for senior-level executive talent to their home countries

• Some companies believe

– It is important to have international assignments early in a person’s career

– International training is an integral part of their entry-level development programs

• Many companies are active in making the foreign experience an integrated part of a successful corporate career

17-26

Foreign-Language SkillsForeign-Language Skills

• Many believe:

– Learning a language improves cultural understanding and business relationships

– To be taken seriously in the business community, the expatriate must be at least conversational in the host language

• Many companies are making stronger efforts to recruit people who are bilingual or multilingual

17-27

SummarySummary

• The company’s sales force is on the front line of a marketing organization

• The role of marketers in both domestic and foreign markets along with the composition of international managerial and sales forces is rapidly changing

• The recent emphasis on using local personnel operating in their own lands has highlighted the importance of adapting U.S. managerial techniques to local needs

17-28

SummarySummary

• The development of an effective marketing organization calls for careful recruiting, selecting, training, motivating, and compensating of expatriate personnel and their families

• The most practical method of maintaining an efficient international sales and marketing force is careful, concerted planning at all stages of career development