Chapter 16 Textbook Summary Notes.docx

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Department
Management and Organizational Studies
Course
Management and Organizational Studies 2320A/B
Professor
Kevin Thompson
Semester
Winter

Description
Chapter 16 Textbook Summary Notes Personal Selling and Sales Promotion  Personal selling: personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships  One of the oldest professions in the world  Today, most salespeople are well-educated, well-trained, professional who add value for customers and maintain long-term customer relationships  They listen to their customers, assess customer needs, and organize the company’s efforts to solve customer problems  Salesperson: an individual representing a company to customers by performing one or more of the following activities: prospecting, communicating, selling, servicing, information gathering, or relationship building  A salesperson might be largely an order taker or an order getter, whose positions demand creative selling and relationship building for products and services  The Role of the Sales Force o Personal selling involves interpersonal interactions between salespeople and individual customers – whether face to face, by telephone, via email, through video or web conference, or by other means o Personal selling can be more effective o Varies from company to company  Linking the Company with its Customers o They represent the company to customers o They represent customers to the company o To many customers, the salesperson IS the company – the only tangible manifestation of the company that they see  Coordinating Marketing Sales o The sales force and the firms other marketing functions should work together closely to jointly create value for both customers and the company o Some companies still treat marketing and sales as separate functions o The marketers sometimes feel that salespersons have their feet stuck in the mud whereas salespeople feel that the marketers have their heads stuck in the clouds o Such disconnects between marketing and sales can damage customer relationships and company performance o To fix this, it can increase communication between the two groups by arranging joint meetings and by spelling out when and with whom each group should communicate o The company can also create joint assignments o A company can also create joint objectives and reward systems for sales and marketing or appoint marketing-sales liaisons – people from marketing who live with the sales force and appoint a chief revenue office – a high level marketing executive who oversees both marketing and sales  Sales force management: the analysis, planning, implementation, and control of sales force activities. It includes designing sales force strategy and structure, and recruiting, selecting, training, supervising, compensating, and evaluating the firms salespeople  Sales Force Structure o A company can divide sales responsibilities along any of several lines o The decision is simple if the company sells only one product line to one industry with customers in many locations o Territorial sales force structure  A sales force organization that assigns each salesperson to an exclusive geographic territory in which that salesperson sells the company’s full line  Clearly defines each salespersons job and fixes accountability  Increases the salespersons desire to build local customer relationships that, in turn, improve selling effectiveness  Used when the company sells only one product line to one industry with customers in many locations  Salesperson travels within a limited geographic area, travel expenses are relatively small  Sales merchandisers report to sales representatives, who report to retail supervisors, who report to directors of retail sales operations, who report to one of 22 regional sales managers who report to a general sales manager who report to a vice president and general sales manager o Product Sales Force Structure  A sales force organization under which salespeople specialize in selling only a portion of the company’s products or lines  Can lead to problems, however, if a single large customer buys many different company products  Travel over the same routes and wait to see the customer’s purchasing agents o Customer Sales Force Structure  A sales force organization under which salespeople specialize in selling only to certain customers or industries  Serving new customers vs. old ones or major accounts vs. regular accounts o Complex Sales Force Structure  When a company sells a wide variety of products to many types of customers over a broad geographic area, it often combines several types of sales force structures  A good sales structure can mean the difference between success and failure  Sales Force Size o Sales forces may range in size from only a few salespeople to tens of thousands o They are the most productive and most expensive assets o A company first groups account into different classes according to size, account status, or other factors related to the amount of effort required to maintain them  Other Sales Force Strategy and Structure Issues o Who will be involved in the selling effort and how many various sales and sales support people will work together o Outside and Inside Forces  Outside sales force: outside salespeople who travel to call on customers in the field  Inside sales force: inside salespeople who conduct business from their offices via telephone, the internet, or visits from prospective buyers  Some inside salespeople provide support for the outside sales force (technical support people)  Sales assistant provide administrative backup for outside salespeople  Telemarketers and web sellers use the phone and internet to find new leads and qualify prospects or to sell and service accounts directly  Telemarketing and web selling can be very effective, less costly ways to sell to smaller, harder to reach customers  Canada’s National Do Not Call List put a dent in telephone sales o Team Selling  Using teams of people from sales, marketing, engineering, finance, technical support, and even upper management of service large, complex accounts  Might include experts from any area or level of the selling firm  Does have pitfalls  Salespeople are by nature competitive and have often been trained and rewarded for outstanding individual performance  May have trouble learning to work with and trust others on a team  Selling teams can confuse or overwhelm customers who are used to working with only one salesperson  Difficulties in evaluating individual contributions tot eh team selling effort can create some sticky compensation issues  Recruiting and Selecting Salespeople o When recruiting, a company should analyze the sales job itself and the characteristics of the most successful salespeople to identify the traits needed by a successful salesperson in their industry o The selection procedure can vary from a single informal interview to length testing and interviewing o Many companies give formal tests to sales applicants o Test typically measure sales aptitude, analytical and organization skills, personality traits, and other characteristics  Training Salespeople o New salespeople may spend anywhere from a few weeks or months to a year or more in training o Salespeople need to know about customers and how to build relationships with them o Must teach them how to sell effectively and train them in the basics of the selling process o Need to know and identify with the company, its products, and its competitors o Effective training program teaches them about the company’s objectives, organization, and chief products and markets, and about the strategies of major competitors o Now training on PDAs, cell phones, iPods, Online and other e-learning approaches  Compensating Salespeople o To attract good salespeople, a company must have an appealing compensation plan o Made up of several elements – a fixed amount, a variable amount, expenses, and fringe benefits o The fixed amount, usually a salary, gives the salesperson some stable income o The variable amount, which might be commissions or bonuses based on sales performance, rewards the salesperson for greater effort and success o Must decide what mix of these compensation elements o The sales force compensation plan can both motivate salespeople and direct their activities o More and more companies are moving away from high commission plans that may drive salespeople to make short-term grabs for business  Supervising and Motivating Salespeople o The goal of supervision is to help salespeople work smart by doing the right things in the right ways o The goal of motivation is to encourage salespeople to work hard and energetically toward sales force goals o Supervising Salespeople  One tool is the weekly, month, or annual call plan that shows which customers and prospects to call on and which activities to carry out  Another tool is time and duty analysis  On average, active selling time accounts for only 10% of total wo
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