Consumer Behaviour
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Consumer (Gen X, Gen Y, Millennial)
Consumer behaviour
Consumer behaviour is the study of individuals, groups, or organizations and the processes they
use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and
the impacts that these processes have on the consumer and society. It blends elements from
psychology, sociology, social anthropology, marketing and economics. It attempts to understand
the decision-making processes of buyers, both individually and in groups such as how emotions
affect buying behaviour. It studies characteristics of individual consumers such as demographics
and behavioural variables in an attempt to understand people's wants. It also tries to assess
influences on the consumer from groups such as family, friends, reference groups, and society in
general.
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Consumption communities
communities appear integrated with the market and seem to share meanings, values, rules, and
other institutional elements of market ideology. In other cases they assume critical positions,
explicitly or not, and seem to counteract the ideology and, in some instances, the entire exchange
process of the market.
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Digital natives
A digital native is a person who was born during or after the general introduction of digital
technologies and through interacting with digital technology from an early age, has a greater
comfort level using it. Alternatively, this term can describe people born during or after the 1985,
as the Digital Age began at that time; but in most cases, the term focuses on people who grew up
with the technology that became prevalent in the latter part of the 20th century and continues to
evolve today
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Social marketing
Social marketing seeks to develop and integrate marketing concepts with other approaches to
influence behaviors that benefit individuals and communities for the greater social good. It seeks
to integrate research, best practice, theory, audience and partnership insight, to inform the
delivery of competition sensitive and segmented social change programs that are effective,
efficient, equitable and sustainable
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User generated contents
User-generated content (UGC) refers to a variety of media available in a range of modern
communications technologies. UGC is often produced through open collaboration it is created by
goal-oriented yet loosely coordinated participants who interact to create a product or service of
economic value, which they make available to contributors and non-contributors alike.
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Absolute threshold
absolute threshold is the lowest level of a stimulus —light, sound, touch, etc.—that an organism
can detect. However, at this low level, subjects sometimes detect the stimulus and sometimes do
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not. Therefore, an alternative definition of absolute threshold is the lowest intensity at which a
stimulus can be detected 50% of the time.
The absolute threshold can be influenced by several different factors, such as the subject's
motivations and expectations, cognitive processes, and whether the subject is adapted to the
stimulus.
The absolute threshold can be compared to the difference threshold, which is the measure of how
different two stimuli must be for the subject to notice that they are not the same.
J.n.d.
just-noticeable difference, customarily abbreviated with lowercase letters as jnd, is the smallest
detectable difference between a starting and secondary level of a particular sensory stimulus. It is
also known as the difference limen, differential threshold, or least perceptible difference.
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Hedonic consumption
The consumption of products based primarily on the desire to experience pleasure and happiness.
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Perception
Perception (from the Latin perceptio, percipio) is the organization, identification, and
interpretation of sensory information in order to represent and understand the environment. All
perception involves signals in the nervous system, which in turn result from physical or chemical
stimulation of the sense organs. For example, vision involves striking the retina of the eye, smell
is mediated by odor molecules, and hearing involves pressure waves. Perception is not the passive
receipt of these signals, but is shaped by learning, memory, expectation, and attention. Perception
involves these "top-down" effects as well as the "bottom-up" process of processing sensory input.
The "bottom-up" processing transforms low-level information to higher-level information (e.g.,
extracts shapes for object recognition). The "top-down" processing refers to a person's concept
and expectations (knowledge), and selective mechanisms (attention) that influence perception.
Perception depends on complex functions of the nervous system, but subjectively seems mostly
effortless because this processing happens outside conscious awareness.
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Sensory marketing
sensory marketing has now become the type of marketing used by everyone who
wishes to sell a product or a brand. In fact, I think that we can no longer refer to
Sensory Marketing as in ” Marketing of the future” but as ” Marketing of the
present”.
how consumer perceptions and responses change as a function of the sensuality of products. We
mainly try to understand how sensory aspects of products (i.e., the touch, taste, smell, sound and
visual aspects of products) affect consumer emotions, memories, perceptions, preferences,
choices and consumption of these products. Our research helps in designing products and services
with new sensations or in bringing attention to existing sensations that can increase a product's
appeal.
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Subliminal perception
psychol perception of or reaction to a stimulus that occurs without awareness or consciousness.
Also called: subception.
Subliminal perception occurs whenever stimuli presented below the threshold or limen for
awareness are found to influence thoughts, feelings, or actions. The term subliminal perception
was originally used to describe situations in which weak stimuli were perceived without
awareness. In recent years, the term has been applied more generally to describe any situation in
which unnoticed stimuli are perceived.
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Brand equity
Brand equity is a phrase used in the marketing industry which describes the value of having a
well-known brand name, based on the idea that the owner of a well-known brand name can
generate more money from products with that brand name than from products with a less well
known name, as consumers believe that a product with a well-known name is better than products
with less well-known names
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Brand personality
A set of human characteristics that are attributed to a brand name. A brand personality is
something to which the consumer can relate, and an effective brand will increase its brand equity
by having a consistent set of traits. This is the added-value that a brand gains, aside from its
functional benefits. There are five main types of brand personalities: excitement, sincerity,
ruggedness, competence and sophistication.
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Brand loyalty
Brand loyalty is where a person buys products from the same manufacturer repeatedly rather
than from other suppliers
In a survey of nearly 200 senior marketing managers, 68 percent responded that they found the
"loyalty" metric very useful
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Neuro-marketing
Neuromarketing is a new field of marketing research that studies consumers' sensorimotor, cognitive,
and affective response to marketing stimuli. Researchers use technologies such as functional magnetic
resonance imaging (FMRI) to measure changes in activity in parts of the brain, electroencephalography
(EEG) and Steady state topography (SST) to measure activity in specific regional spectra of the brain
response, and/or sensors to measure changes in one's physiological state, also known as biometrics,
including (heart rate and respiratory rate, galvanic skin response) to learn why consumers make the
decisions they do, and what part of the brain is telling them to do it. Neuromarketing research raised
interest for both academic and business side. In fact, certain companies, particularly those with large-scale
goals, have invested in their own laboratories, science personnel and / or partnerships with academia.
Companies such as Google, CBS, and Frito-Lay amongst others have used neuromarketing research
services to measure consumer thoughts on their advertisements or products.
The word "neuromarketing" was coined by Ale Smidts in 2002
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Positive (negative) reinforcements
Positive reinforcement occurs when an event or stimulus is presented as a consequence of a behavior
and the behavior increases.
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Example: Whenever a rat presses a button, it gets a treat. If the rat starts pressing the button more
often, the treat serves to positively reinforce this behavior.
Example: A father gives candy to his daughter when she picks up her toys. If the frequency of
picking up the toys increases, the candy is a positive reinforcer (to reinforce the behavior of
cleaning up).
Negative reinforcement occurs when the rate of a behavior increases because an aversive event or
stimulus is removed or prevented from happening.
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Example: A child cleans his or her room, and this behavior is followed by the parent stopping
"nagging" or asking the child repeatedly to do so. Here, the nagging serves to negatively reinforce
the behavior of cleaning because the child wants to remove that aversive stimulus of nagging.
Example: A person puts ointment on a bug bite to soothe an itch. If the ointment works, the
person will likely increase the usage of the ointment because it resulted in removing the itch,
which is the negative reinforcer.
Stimulus discrimination
Stimulus Discrimination is when we learn to respond only to the original stimulus, and not to
other similar stimuli. The concept of Stimulus Discrimination follows from the idea of Stimulus
Generalization, which is when we respond not only to the original stimulus, but also to other
similar stimuli.
For example, whenever you come home from work, the first thing you do is feed your dog. As a
result, your dog gets excited as soon as he hears your car pulling up at the driveway, barking and
running to the door. Eventually, he begins to get excited as soon as any family member arrives in
their car, thinking that he will get fed as well. Everytime he hears any car pull up at the driveway,
he starts barking and running to the door. That is Stimulus Generalization. But if none of the
other family members ever feed the dog as soon as they arrive home, your dog eventually learns
that it is only the sound of your car pulling up at the driveway that's worth getting excited about.
That is Stimulus Discrimination, because he learns to distinguish only the specific sound that
means food is coming, and learns to ignore all other car sounds as not relevant to his getting fed.
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Cult products
Cult products can be defined as products that command fierce consumer loyalty, devotion, and maybe
even worship by consumers who are very highly involved with a brand. (Solomon, 2009)
Examples of Cult Products:
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Apple computers
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Harley-Davidson Motorcycles
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Krispy Kreme Dounuts
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Jones Soda
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Cognitive dissonance
In psychology, cognitive dissonance is the mental stress or discomfort experienced by an
individual who holds two or more contradictory beliefs, ideas, or values at the same time, or is
confronted by new information that conflicts with existing beliefs, ideas, or values.
Leon Festinger's theory of cognitive dissonance focuses on how humans strive for internal
consistency. When inconsistency (dissonance) is experienced, individuals tend to become
psychologically uncomfortable and are motivated to attempt to reduce this dissonance, as well as
actively avoiding situations and information which are likely to increase it
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Self concept
Pleasure principle (Id, Ego, Super-ego) One's self-concept (also called self-construction, selfidentity, or self-perspective) is a collection of beliefs about oneself that includes elements such
as academic performance, gender roles and sexuality, and racial identity.[11] Generally, selfconcept embodies the answer to "Who am I?".
One's self-concept is made up of self-schemas, and their
past, present, and future selves.
Self-concept is distinguishable from self-awareness, which refers to the extent to which selfknowledge is defined, consistent, and currently applicable to one's attitudes and disposition.. Selfconcept also differs from self-esteem: self-concept is a cognitive or descriptive component of
one's self (e.g. "I am a fast runner"), while self-esteem is evaluative and opinionated (e.g. "I feel
good about being a fast runner").and interacts with self-esteem, self-knowledge, and the social
self to form the self as whole. It includes the past, present, and future selves, where future selves
(or possible selves) represent individuals' ideas of what they might become, what they would like
to become, or what they are afraid of becoming. Possible selves may function as incentives for
certain behavior.
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Bounded rationality
Bounded rationality is the idea that in decision-making, rationality of individuals is limited by
the information they have, the cognitive limitations of their minds, and the finite amount of time
they have to make a decision. It was proposed by Herbert A. Simon as an alternative basis for the
mathematical modeling of decision making, as used in economics, political science and related
disciplines; it complements rationality as optimization, which views decision-making as a fully
rational process of finding an optimal choice given the information available. Another way to
look at bounded rationality is that, because decision-makers lack the ability and resources to
arrive at the optimal solution, they instead apply their rationality only after having greatly
simplified the choices available. Thus the decision-maker is a satisficer, one seeking a
satisfactory solution rather than the optimal on. Simon used the analogy of a pair of scissors,
where one blade is the "cognitive limitations" of actual humans and the other the "structures of
the environment"; minds with limited cognitive resources can thus be successful by exploiting
pre-existing structure and regularity in the environment.
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Reference group
A reference group is a group to which an individual or another group is compared.Sociologists call
any group that individuals use as a standard for evaluating the mselves and their own behavior a
reference group. Reference groups are used in order to evaluate and determine the nature of a given
individual or other group's characteristics and sociological attributes. It is the group to which the
individual relates or aspires to relate himself or herself psychologically. It becomes the individual's
frame of reference and source for ordering his or her experiences, perceptions, cognition, and ideas of
self. It is important for determining a person's self-identity, attitudes, and social ties. It becomes the
basis of reference in making comparisons or contrasts and in evaluating one's appearance and
performance. Reference groups provide the benchmarks and contrast needed for comparison and
evaluation of group and personal characteristics. Robert K. Merton hypothesized that individuals
compare themselves with reference groups of people who occupy the social role to which the
individual aspires.[1]
Reference groups are groups that people refer to when evaluating their [own] qualities,
circumstances, attitudes, values and behaviors.
—William Thompson & Joseph Hickey, Society in Focus, 2005.
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Normative influence
Normative social influence is a type of social influence leading to conformity. It is defined as
"the influence of other people that leads us to conform in order to be liked and accepted by them".
Normative social influence's power stems from the human identity as a social creature, with a
need for companionship and association. This fact often leads to people exhibiting public
compliance—but not necessarily private acceptance—of the group's social norms in order to be
accepted by the group. Social norms refers to the unwritten rules that govern social behavior.
These are customary standards for behavior that are widely shared by members of a culture
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Virtual worlds
A virtual world or massively multiplayer online world (MMOW) is a computer-based
simulated environment. The term has become largely synonymous with interactive 3D virtual
environments, where the users take the form of avatars visible to others. These avatars can be
textual, two or three-dimensional graphical representations, or live video avatars with auditory
and touch sensations. In general, virtual worlds allow for multiple users
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Viral marketing
Viral marketing, viral advertising, or marketing buzz are buzzwords referring to marketing
techniques that use pre-existing social networking services and other technologies to try to
produce increases in brand awareness or to achieve other marketing objectives (such as product
sales) through self-replicating viral processes, analogous to the spread of viruses or computer
viruses (cf. Internet memes and memetics). It can be delivered by word of mouth or enhanced by
the network effects of the Internet and mobile networks.[1] Viral marketing may take the form of
video clips, interactive Flash games, adver games, ebooks, brand able software, images, text
messages, email messages, or web pages. The most commonly utilized transmission vehicles for
viral messages include: pass-along based, incentive based, trendy based, and undercover based.
However, the creative nature of viral marketing enables an "endless amount of potential forms
and vehicles the messages can utilize for transmission", including mobile devices.
The ultimate goal of marketers interested in creating successful viral marketing programs is to
create viral messages that appeal to individuals with high social networking potential (SNP) and
that have a high probability of being presented and spread by these individuals and their
competitors in their communications with others in a short period of time.[3]
The term "VRL marketing" has also been used pejoratively to refer to stealth marketing
campaigns—the unscrupulous use of astroturfing online combined with under market advertising
in shopping centers to create the impression of spontaneous word of mouth enthusiasm.
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Co-branding
Co-branding refers to several different marketing arrangements:
Co-branding, also called brand partnership,[1] is when two companies form an alliance to work
together, creating marketing synergy. As described in Co-Branding: The Science of Alliance:
"the term 'co-branding' is relatively new to the business vocabulary and is used to encompass a
wide range of marketing activities involving the use of two (and sometimes more) brands. Thus
co-branding could be considered to include sponsorships, where Marlboro lends it name to Ferrari
or accountants Ernst and Young support the Monet exhibition."
Co-branding is an arrangement that associates a single product or service with more than one brand name,
or otherwise associates a product with someone other than the principal producer. The typical co-branding
agreement involves two or more companies acting in cooperation to associate any of various logos, color
schemes, or brand identifiers to a specific product that is contractually designated for this purpose. The
object for this is to combine the strength of two brands, in order to increase the premium consumers are
willing to pay, make the product or service more resistant to copying by private label manufacturers, or to
combine the different perceived properties associated with these brands with a single product.
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Status symbol
A status symbol is a perceived visible, external denotation of one's social position and perceived
indicator of economic or social status. Many luxury goods are often considered status symbols.
Status symbol is also a sociological term – as part of social and sociological symbolic
interactionism – relating to how individuals and groups interact and interpret various cultural
symbols
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High context culture
High-context culture and the contrasting low-context culture are terms presented by the
anthropologist Edward T. Hall in his 1976 book Beyond Culture. It refers to a culture's tendency
to use high-context messages over low-context messages in routine communication. This choice
of speaking styles translates into a culture that will cater to in-groups, an in-group being a group
that has similar experiences and expectations, from which inferences are drawn. In a highercontext culture, many things are left unsaid, letting the culture explain. Words and word choice
become very important in higher-context communication, since a few words can communicate a
complex message very effectively to an in-group (but less effectively outside that group), while in
a low-context culture, the communicator needs to be much more explicit and the value of a single
word is less important.
SALES & DISTRIBUTION MANAGEMENT
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Issues in Rural distribution channels
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Lack of adequate transport facilities,
Large distances between villages,
Lack of pucca roads connecting villages to nearest townships,
Lack of proper retail out lets
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Channel Conflict
Channel conflict occurs when manufacturers (brands) dis intermediate their channel partners,
such as distributors, retailers, dealers, and sales representatives, by selling their products directly
to consumers through general marketing methods and/or over the Internet.
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Logistics Planning
Developing an efficient and effective unbiased logistics plan involves developing what Saenz
calls “best-practice solutions” and defining detailed future planning requirements. “The result of
this approach is a future distribution center logistics plan that considers the full facility expansion
capability on your available site, which maximizes your space, equipment, and labor resources.”
The unbiased approach is available through consulting firms that do not have exclusive alliances
with suppliers. Regardless of the approach used by a company, developing a logistics plan is a
critical first step to design and build an efficient distribution center.
Franchisee Mgmt
Franchising is the practice of leasing for a prescribed period of time the right to use a firm's
successful business model and brand. The word "franchise" is of Anglo-French derivation—from
franc, meaning free—and is used both as a noun and as a (transitive) verb. For the franchiser, the
franchise is an alternative to building "chain stores" to distribute goods that avoids the
investments and liability of a chain. The franchisor's success depends on the success of the
franchisees. The franchisee is said to have a greater incentive than a direct employee because he
or she has a direct stake in the business.
Essentially, and in terms of distribution, the franchisor is a supplier who allows an operator, or a
franchisee, to use the supplier's trademark and distribute the supplier's goods. In return, the
operator pays the supplier a fee.
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Distribution thru internet
The Global Distribution Systems (GDS) provides consumers the ability to book airline tickets, hotel
rooms and rental cars through Internet gateways called the Internet Distribution System (IDS). The
Internet Distribution System is a collection of more than 2000 internet reservation systems, travel
websites, online reservation systems and travel portals which specialize in internet marketing of travel
and related services directly to consumers. These online systems have distinctive features that can be used
to drive potential travelers to a given destination and/or travel company. Unlike booking through a travel
agent or tour operator, any consumer with access to the World Wide Web has the ability to book travel on
their own.
The Internet Distribution System offers technology that allows customers to build complete trips that
combine flights, hotels and other lodging, transportation, and destination activities. Travelers have the
ability to research, plan, and book their travel needs from a broad selection of partners. Technology
allows the travel suppliers to change offers quickly so consumers may find great last minute deals to
purchase.
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Modern Trade Formats
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Channel Power
The degree of organizational weight and control that those making up a product distribution
network can wield. A distribution channel used by a business to delivery its product to market is
typically composed of a number of parties - often with differing degrees of channel power - that
each add value to the product by bringing it closer to potential consumers.
 Channel Information System
Channel Information system (CIS) are basically used to collect, store and interpret information in a
manner that adds value to an organization’s functions.
Channel information systems comprise an information database and the hardware and networks that help
in the collection, processing and transmission of information. The hardware, software and networks vary
depending on the application requirements of channel members. They vary for business-to-business
applications, retailing applications, business to consumer applications and interactive applications for
consumers
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Methods of motivating channel partners
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Make it easy
What’s the best way to make sure partners get involved with your incentive program? Make it
easy for them to access. Top-performing incentive programs are as easy as logging into the
partner portal, giving single click-through access to users (no separate sign-on!). A straightforward rule structure with a simple claim process can be achieved through consolidated POS
data, even for alliance partners.
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2. Use Marketing knowledge as an Incentive
Partners today are looking to vendors for marketing knowledge and tools to help them promote
new solutions and services. Many are also looking to vendors for assistance in developing a
sound cloud services business plan. Information on how to project revenues, manage cash flow,
and re-design sales compensation structures to successfully transition to a recurring revenue
business model, are all helpful and can be provided as incentives.
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3. Provide Incentives across the partner-life cycle and throughout the sales cycle
Incentives need to support more than just deals won and quarterly revenue goals. Offering a wide
range of pre-packaged marketing activities to your partners ensures that your partners are
successful while keeping in line with your brand. Shift the focus from just closed deals to
opportunities. Also, incentivize partners throughout the life-cycle for education, training and
certification. Incentives can be offered when partners complete activities like developing new
business plans, learning more about marketing and completing trainings on how to sell your new
solutions and services.
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4. Consolidate platforms
With economic challenges still facing us all, it is crucial to consolidate platforms to maximize
efficiency. Consolidating your incentive programs to as few platforms as possible, ideally one,
makes it significantly easier to run your program globally. It also offers flexibility to tailor
programs to meet regional needs, while having information rolling into one single database. Thus,
offering easier access for your partners and less headache for you.
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5. Measure performance
Tracking ongoing performance metrics helps you not only understand the performance of your
partners, it also helps you gauge the effectiveness of your incentive programs in driving desired
behavior within your channel. How can this help your partners? Ensuring they have the ability to
track their performance by providing them with measurement and dashboard tools can help keep
them motivated. Seeing the visual layout of their progress will drive motivation and success.
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Disintermediation
In economics, disintermediation is the removal of intermediaries in a supply chain, or "cutting
out the middlemen". Instead of going through traditional distribution channels, which had some
type of intermediate (such as a distributor, wholesaler, broker, or agent), companies may now
deal with every customer directly, for example via the Internet.[1] One important factor is a drop
in the cost of servicing customers directly.
This can also happen in other industries where distributors or resellers operate and the
manufacturer wants to increase profit margins, therefore missing out intermediaries to increase
their margins.
Disintermediation initiated by consumers is often the result of high market transparency, in that
buyers are aware of supply prices direct from the manufacturer. Buyers bypass the middlemen
(wholesalers and retailers) to buy directly from the manufacturer, and pay less. Buyers can
alternatively elect to purchase from wholesalers. Often, a business-to-consumer electronic
commerce (B2C) company functions as the bridge between buyer and manufacturer.
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Emerging role of sales managers
A sales manager plays a key role in the success and failure of an organization. He is the one who
plays a pivotal role in achieving the sales targets and eventually generates revenue for the
organization.
A sales manager must be very clear about his role in the organization. He should know what he is
supposed to do at the workplace.
Let us understand the roles and responsibilities of a sales manager:
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A sales manager is responsible for meeting the sales targets of the organization through
effective planning and budgeting.
A sales manager can’t work alone. He needs the support of his sales team where each one
contributes in his best possible way and works towards the goals and objectives of the
organization. He is the one who sets the targets for the sales executives and other sales
representatives. A sales manager must ensure the targets are realistic and achievable.
 The duties must not be imposed on anyone, instead should be delegated as per interests and
specializations of the individuals. A sales manager must understand who can perform a
particular task in the most effective way. It is his role to extract the best out of each employee.
 A sales manager devises strategies and techniques necessary for achieving the sales targets. He
is the one who decides the future course of action for his team members.
 It is the sales manager’s duty to map potential customers and generate leads for the
organization. He should look forward to generating new opportunities for the organization.
 A sales manager is also responsible for brand promotion. He must make the product popular
amongst the consumers. A banner at a wrong place is of no use. Canopies must be placed at
strategic locations; hoardings should be installed at important places for the best results.
 Motivating team members is one of the most important duties of a sales manager. He needs to
make his team work as a single unit working towards a common objective. He must ensure
team members don’t fight amongst themselves and share cordial relationship with each other.
Develop lucrative incentive schemes and introduce monetary benefits to encourage them to
deliver their level best. Appreciate whenever they do good work.
 It is the sales manager’s duty to ensure his team is delivering desired results. Supervision is
essential. Track their performances. Make sure each one is living up to the expectations of the
organization. Ask them to submit a report of what all they have done through out the week or
month. The performers must be encouraged while the non performers must be dealt with
utmost patience and care.
 He is the one who takes major decisions for his team. He should act as a pillar of support for them
and stand by their side at the hours of crisis.
 A sales manager should set an example for his team members. He should be a source of
inspiration for his team members.
 A sales manager is responsible for not only selling but also maintaining and improving
relationships with the client. Client relationship management is also his KRA.
 As a sales manager, one should maintain necessary data and records for future reference.
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Ethics in sales management
Common Ethical Issues for Salespeople
What are the most common ethical issues facing salespeople? Many of the most common situations you
could face as a salesperson involve issues such as the following:
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A customer asking for information about one of their competitors, who happens to be one of your
customers
Deciding how much to spend on holiday season gifts for your customers
A buyer asking for something special, which you could easily provide, but aren’t supposed to
give away
Deciding to play golf on a nice day, since no one knows if you are actually at work or not
Sales Forecasting methods
o Executive Opinion
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o
Sales Force Composite
o
User’s Expectations
o
Build-to-Order
o
Time series
o
Native
o
Moving average
o
Exponential
Sales Budget
A sales budget estimates the sales in units as well as the estimated earnings from these sales.
Management carefully analyzes economic conditions, market competition, production capacity,
and selling expenses when developing the sales budget. All of these factors play an important role
in the company's future performance. Basically, the sales budget is what management expects to
sell and the revenues collected from these sales.
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Types of Sales Quota
o Sales volume quotas.
o
Breakdown total sales volume.
o
Profit quotas.
o
Expense quotas.
o
Activity quotas.
o Quota combinations.
Financial compensation vs Non financial compensation
Financial compensation refers to the act of providing a person with money or other things of economic
value in exchange for their goods, labor, or to provide for the costs of injuries that they have incurred.
Kinds of financial compensation include:
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Damages, legal term for the financial compensation recoverable by reason of another's breach of
duty
Nationalization compensation, compensation paid in the event of nationalization of property
Payment
Remuneration
o Deferred compensation
o Executive compensation
o Royalties
o Salary
o Wage
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Workers' compensation, to protect employees who have incurred work-related injuries
Non-financial compensation doesn't have any monetary value; instead, it involves the satisfaction that
en employee receives from his work environment. This satisfaction can be emotional and psychological.
 Parameters for Setting up Sales Territory
Sales force objectives may be based on factors such as contribution to profits, return on assets,
sales/cost ratios, market share, or customer satisfaction.
• States
•
Counties
•
Cities and zip-code areas
•
Metropolitan statistical areas
•
Trading areas
•
Major accounts
•
A combination of two or more factors
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Sales Force Control
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Value enhancement thru channels
In buyer–seller relationships, the focus has moved beyond individual firms to value-creating
networks formed by key firms in the value chain that deliver value to the end consumer. The
article develops a rationale for value-creating networks using three core building blocks: superior
customer value, core competencies, and relationships. The rationale is developed based upon an
understanding of the value-creation process and its links to core capabilities of firms in the
network. The importance of inter-firm relationships in realizing the true potential of the valuecreation networks is also highlighted. The authors argue based on their sample analysis of some
examples that competition in the future will shift to the network level from the firm level. The
influence of some emerging business tools such as electronic commerce on redefining value
creation is also discussed.
 Changing sales environment
We discuss external environmental changes affecting the sales force in terms of four categories of
influences, including customers, competitors, technology, and the ethical and regulatory
environment. The organization’s efforts to adapt itself to, and, in some respects, control, changes
in the external environment result in changing internal structures and processes (Dyer and Singh
1998; Eisenhardt 2002; Harrigan 2001) that have important implications for sales force
management. These influences are depicted in Figure 1. Collectively, these changes in the
external and internal organizational environments challenge salespeople’s and executives’
capacity to adapt and perform to meet rising standards. They also suggest needs and opportunities
for research.