Module Three
Organizational Strategies
and The Sales Function
Organizational Strategy Levels
Strategy
Level
Key
Decision Areas
Key
Decision Makers
Corporate
Strategy
Corporate Mission
SBU Definition
SBU Objectives
Corporate
Management
Sales
Strategy
Strategy Types
Strategy Execution
SBU
Management
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Organizational Strategy Levels
Strategy
Level
Marketing
Strategy
Key
Decision Areas
Key
Decision Makers
Target Market Selection
Integrated Mkt Comm.
Marketing Mix Dev.
Corporate
Management
Business Account Targeting Strategy
SBU
Sales Channel Strategy
Strategy
Management
Relationship Strategy
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Corporate Strategy
Development Process
• Analyze corporate performance and
identify opportunities and threats
• Determine corporate mission and
objectives
• Define strategic business units
• Set objectives for each strategic
business unit
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Definition of
Strategic Business Units (SBUs)
An SBU is a single product or brand, a
line of products, or a mix of related
products that meets a common market
need or a group of related needs, and the
unit's management is responsible for all
(or most) of the basic business
functions."
Cravens (1991)
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
SBU Objectives and
the Sales Organization
Market Share
Objectives
Build
Professional Selling:
A Trust-Based Approach
Sales
Organization
Objectives
Build sales
volume; Secure
distribution
Primary
Sales Tasks
Prospective and
new accounts
Provide high
service levels
particularly presales service
Product/market
feedback
Module 3:
Organizational Strategies and the Sales Function
Compensation
System
Salary plus
incentive
Ingram
LaForge Avila
Schwepker Jr. Williams
SBU Objectives and
the Sales Organization
Market Share
Objectives
Hold
Professional Selling:
A Trust-Based Approach
Sales
Organization
Objectives
Primary
Sales Tasks
Maintain
Call on targeted
sales volume
current accounts
Consolidate
Incr. service
market position
levels to current
through
accounts
concentration
Call on new
on targeted
accounts
segments
Secure additional
outlets
Module 3:
Organizational Strategies and the Sales Function
Compensation
System
Salary plus
commission
or bonus
Ingram
LaForge Avila
Schwepker Jr. Williams
SBU Objectives and
the Sales Organization
Market Share
Objectives
Harvest
Professional Selling:
A Trust-Based Approach
Sales
Organization
Objectives
Reduce selling
costs
Target profitable
accounts
Primary
Sales Tasks
Service most
profitable
accounts
eliminate
unprofitable
accounts
Reduce service
levels and/or
inventories levels
Module 3:
Organizational Strategies and the Sales Function
Compensation
System
Salary plus
bonus
Ingram
LaForge Avila
Schwepker Jr. Williams
SBU Objectives and
the Sales Organization
Market Share
Objectives
Divest or
Liquidate
Professional Selling:
A Trust-Based Approach
Sales
Organization
Objectives
Minimize selling
costs and clear
out inventory
Primary
Sales Tasks
Dump inventory
Eliminate service
Module 3:
Organizational Strategies and the Sales Function
Compensation
System
Salary
Ingram
LaForge Avila
Schwepker Jr. Williams
Business Strategy and
the Sales Function
• Low-cost supplier
• Differentiation
• Niche
Professional Selling:
A Trust-Based Approach
Pursue
Compete
Serve alarge
distinct
on customers
non-price
target
market benefits
not served well
Minimize cost
by others
Provide high quality
Compete on price
Provide
customer
high
service
quality
Seek
customer
customers
service
who are
Seek customers who are
low price shoppers
Seek
not low
customers
price shoppers
who are
not low price shoppers
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Personal Selling-Driven vs. Advertising-Driven
Marketing Communications Strategies
Personal Selling
When Message Flexibility is Important
When Message Timing is Important
When Reaction Speed is Important
When Message Credibility is Important
When Trying to Close the Sale
When Low Cost per Contact is Important
When Repetitive Contact is Important
When Control of Message is Important
When Audience is Large
Advertising
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Target Market Situations and
Personal Selling
Target Market:
A definition of the specific market segment to be served
Personal Selling-Driven Promotional Strategies are
appropriate when:
– The market consists of only a few buyers that tend to be
concentrated in location
– The buyer needs a great deal of information
– The purchase is important
– The product is complex
– Service after the sale is important
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Integrated Marketing Communications
The strategic integration of multiple
marketing communications tools
communicating a consistent
message in the most effective and
efficient manner.
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
The Sales Strategy Framework
Account
Targeting
Strategy
Buying
Situation
Relationship
Buying
Center
Organizational
Buyer Behavior
Strategy
Account
Salesperson
Sales
Strategy
Buying
Process
Sales Channel
Buying
Needs
Selling
Professional Selling:
A Trust-Based Approach
Strategy
Strategy
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Organizational Buyer Behavior:
Types of Organizations
Major Category
Types
Users: purchase products
and services to produce
other products and services
Business or
Industrial
Organizations
Original Equipment
Manufacturers (OEM):
purchase products to
incorporate into products
Resellers: purchase
products to sell
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Organizational Buyer Behavior:
Types of Organizations
Major Category
Types
Government
Organizations
Federal, State, and
Local Government
Agencies
Institutions
Public and
Private Institutions
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Organizational Buyer Behavior:
Buying Situations
Straight Rebuy Buying Situation
– Routinized Response Behavior
Modified Rebuy Buying Situation
– Limited Problem Solving
New Task Buying Situation
– Extensive Problem Solving
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Organizational Buyer Behavior:
Buying Center
•
•
•
•
•
•
Professional Selling:
A Trust-Based Approach
Initiators
Users
Gatekeepers
Influencers
Deciders
Purchasers
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Organizational Buyer Behavior:
Buying Process
Phase 1: Recognize Problem/Need
Phase 2: Determine Item Specs/Quantity Needed
Phase 3: Specify Item Specs/Quantity Needed
Phase 4: Identify and Qualify Potential Sources
Phase 5: Acquire and Analyze Proposals
Phase 6: Evaluate Proposals/Select Suppliers
Phase 7: Selection of Order Routine
Phase 8: Performance Feedback/Evaluation
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Personal and Organizational Needs
Personal Goals
Organizational Goals
Want a Feeling of Power
Control Cost in Product
Use Situation
Seek Personal Pleasure
Few Breakdowns of Product
Dependable Delivery for
Repeat Purchases
Desire Job Security
Want to be Well Liked
Adequate Supply of
Products
Want Respect
Cost within Budget Limits
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Sales Strategy:
Account-Targeting Strategy
The classification of accounts within
a target market into categories for
the purpose of developing strategic
approaches for selling to each account
or account group.
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Sales Strategy:
Relationship Strategy
A determination of the type of relationship
to be developed with different account
groups.
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Characteristics of
Relationship Strategies
Transaction
Solutions
Partnership
Goal Sell Products
Time
Short
Frame
Add Value
Long
Offering Standardized
Number of
Many
Customers
Professional Selling:
A Trust-Based Approach
Collaborative
Customized
Few
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Sales Strategy:
Selling Strategy
A planned selling approach for each
relationship strategy. Developing
efficient and effective selling strategies is
an important sales management task.
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Matching Selling and
Relationship Strategies
High
Collaborative
Cost
to
Serve
Partnership
Solutions
Transaction
Low
Professional Selling:
A Trust-Based Approach
Commitment
Module 3:
Organizational Strategies and the Sales Function
High
Ingram
LaForge Avila
Schwepker Jr. Williams
Sales Strategy:
Sales Channel Strategy
Ensuring that accounts receive selling effort
coverage in an effective and efficient
manner. Sales channel options include:
– The Internet
– Industrial Distributors
– Independent Representatives
– Team Selling
– Telemarketing
– Trade Shows
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Sales Channel Strategy:
The Internet
Used strategically to:
• Increase Reach
• Gather Information about Customers
• Showcase New Products
• Conduct Surveys
• Enhance Corporate Image
• Obtain Feedback
• Service Existing Customers
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Sales Channel Strategy:
Industrial Distributors
Essentially, channel intermediaries that:
• Have Their Own Sales Force
• May Represent One Manufacturer;
Several Non-competing Manufacturers;
Several Competing Manufacturers
• Take Title to the Goods and Normally
Carry Inventory
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Sales Channel Strategy:
Independent or Manufacturers’ Reps
Outsourcing the selling effort to individuals or
organizations that:
• Sell complimentary products from non-competing
manufacturers.
• Do Not Take Title to the Goods or Carry Inventory
• Are Paid for Performance
• Have Control over the Selling Effort
• May Control Access to Customer Information
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Sales Channel Strategy:
Team Selling
Multiple individuals from the selling
organization working together to develop
and expand relationships with one or more
accounts. The salesperson typically
coordinates the team’s selling efforts.
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Sales Channel Strategy:
Telemarketing
Using the telephone as a means of customer contact.
This low-cost method of customer relationship
management may replace field sales force for certain
accounts. When integrated with field sales force,
activities include:
– Prospecting, Qualifying Leads, Conducting Surveys
– Taking Orders, Checking on Order Status, Handling
Order Problems
– Following Up for Repeat Business
Professional Selling:
A Trust-Based Approach
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams
Sales Channel Strategy:
Trade Shows
Events at which the company exhibits its
wares. Used by organizations to:
•
•
•
•
•
•
•
Professional Selling:
A Trust-Based Approach
Generate Leads
Test Market New Products
Introduce New Products
Close Sales
Gather Competitive Information
Service Existing Customers
Enhance Corporate Image
Module 3:
Organizational Strategies and the Sales Function
Ingram
LaForge Avila
Schwepker Jr. Williams