MKTG 341 Sales Management: Analysis and Decision Making 8th Edition CH 3

corporate strategy
An organizational strategy level that consists of decisions that determine the mission, business portfolio, and future growth directions for the entire corporate entity.
– Key decision areas include: corporate mission, Strategic business unit definition, and Strategic business unit objectives.
– Key decision makers include: Corporate management
1. Analyzing the corporate situation to identify potential opportunities and threats
2. Determining corporate mission and objectives
3. Defining strategic business units
The four required steps involved in developing a *corporate* strategy are:
business strategy
An organizational strategy level that must be developed for each strategic business unit (SBU) in the corporate family, defining how that SBU plans to compete effectively within its industry.
– Key decision areas include: Strategy types and Strategy execution.
– Key decision makers include: Business unit management
strategic business unit (SBU)
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 business functions.
1. Build market share
2. Hold market share
3. Harvest market share
4. Divest/liquidate market share
Name four SBU objectives that affect the development of the sales organization’s objectives, the selling tasks performed by salespeople, and the activities of sales managers.
1. Increase sales volume & expand distribution
2. Maintain sales volume
3. Reduce selling costs & Target profitable accounts
4. Minimize selling costs
Name four sales organization objectives affected by he SBU objectives.
1. Get new accounts & Increase sales to existing accounts – Salary plus sales-based incentives.
2. Maintain sales to current accounts & Replace lost sales with new accounts – Salary + commission and/or bonus
3. Service most profitable accounts; Eliminate unprofitable accounts; Reduce service levels; Reduce inventory – Salary + profit-based incentives
4. Dump inventory & Eliminate service – Salary
Identify the four primary sales tasks and the recommended compensation.
marketing strategy
An organizational strategy level that includes the selection of target market segments and the development of a marketing mix to serve each market.
– Key decision areas include: Target market selection, Marketing mix development, and Integrated marketing communications
– Key decision makers include: Marketing management
target markets; marketing mixes
The key components in marketing strategy development are selecting ______ and designing _______.
sales strategy
This organizational strategy is designed to execute an organization’s marketing strategy for individual accounts. Its major purpose is to develop a specific approach for selling to individual accounts within a target market. It also capitalizes on the important differences among individual accounts of groups of similar accounts.
– Key decision areas include: Accounting targeting strategy, Relationship strategy, Selling strategy, and Sales channel strategy.
– Key decision makers include: Sales management
sales strategy
An organizational strategy that directs sales person interaction with accounts, defines how specific accounts are to be managed and covered, and must be based on an understanding of the buying situation, buying center, buying process, and buying needs of the account.
1. Major impact on a firm’s sales and profit performance
2. Influences many other sales management decisions
A firm’s sales strategy is important for 2 basic reasons:
Specific customers are referred to as ______.
corporate mission statement
A statement that provides direction for strategy development and execution throughout the organization.
simple; complete; communicated
The most successful corporate mission statements are ____, ____, and _____.
business unit portfolio
A firm’s portfolio of their SBUs.
generic business strategies
The most popular of classification schemes used in developing a business unit strategy. These generic strategies are low cost, differentiation, or niche.
low-cost (supplier) strategy
Aggressive construction of efficient-scale facilities vigorous pursuit of cost reductions from experience, tight costs, and overhead control, usually associated with high relative market share.
differentiation strategy
Creation of something perceived industry-wide as being unique. Provides insulation against competitive rivalry because of brand loyalty and resulting in lower sensitivity to price.
niche strategy
Service of a particular target market, with each functional policy developed with this target market in mind. Although market share in the industry might be low, the firm dominates a segment within the industry.
customer relationship management (CRM)
A business strategy to select and manage the most valuable customer relationships. It requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes.
target market
A specific market segment to be served.
marketing mix
A marketing offer designed to appeal to a defined target market.
business marketing
A marketing situation in which the business is the target market.
integrated marketing communication (IMC)
The strategic integration of multiple marketing communication tools in the most effective and efficient manner.
Organizations that purchase products and services to produce other products and services.
marketing; sales
One of the keys to integrating marketing communications successfully is greater coordination between the _______ and _________ functions.
original equipment manufacturer (OEM)
Organizations that purchase products to incorporate into products.
Those who use the product to be purchased.
Those who start the organizational purchasing process.
Those who control the flow of information between buying center members.
Those who provide input for the purchasing decision.
Those who make the final purchase decision.
Those who implement the purchasing decision.
1. users
2. initiators
3. gatekeepers
4. influencers
5. deciders
6. purchasers
Six roles that buying center members might play in a particular purchasing decision are:
Organizations that purchase products to sell.
government organization
Federal, state, and local government agencies.
Public and private organizations.
new task buying situation
A situation in which an organization is purchasing a product for the first time.
extensive problem solving
The lengthy decision-making process to collect and evaluate purchase information in new task buying situations.
modified rebuy buying situation
A situation that exists when an account has previously purchased ans used the product.
limited problem solving
The decision-making process that occurs in a modified rebuy buying situation that involves collecting additional information and making a change when purchasing a replacement order.
straight rebuy buying situation
A situation wherein an account has considerable experience i using the products and is satisfied with the current purchase arrangements.
buying center
The many individuals from a firm who participate in the purchasing process.
routinized response behavior
The process in which a buyer is merely reordering from the current supplier.
buying process
Organizational buying behavior that consists of several phases: Phase 1 is recognition of problem or need; Phase 2 is determination of the characteristics of the item and the quantity needed; Phase 3 is description of the characteristics of the item and the quantity needed; Phase 4 is search for and qualification of potential sources; Phase 5 is acquisition and analysis of proposals; Phase 6 is evaluation of proposals and selection of suppliers; Phase 7 is selection of an order routine; Phase 8 is performance feedback and evaluation.
buying needs
Buying behavior that can be personal and organizational. The organizational purchasing process is meant to satisfy the needs of the organization; however, the buying center is made up of individuals who want to satisfy individual needs.
relationship strategy
A determination of the type of relationship to be developed with different account groups.
1. Account targeting strategy
2. Relationship strategy
3. selling strategy
4. Sales channel strategy
The four basic sales strategy elements are:
1. *Transaction relationship*- Stimulus response; Mental states
2. *Solutions relationship*- Need satisfaction; Problem solving
3. *Partnership relationship* – Consultative
4. *Collaborative relationship*- Consultative; Customized
Identify the four types of relationship strategies discussed (ranging from low commitment to high commitment/low cost to high cost to serve) are:
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 groups.
independent representatives
Independent sales organizations that sell complementary, but noncompeting products from different manufacturers; also called manufacturer’s representatives or reps.
team selling
The use of multiple-person sales teams in dealing multiple-person buying centers of their accounts.
selling strategy
Involves planning of sales messages and interactions with customers. Selling strategy can be defined at three levels: for a group of customers, i.e., a sales territory; for individual customers; and for specific customer encounters, referred to as sales calls.
account level
Sales managers and salespeople are typically responsible for strategic decisions at the ______.
sales channel strategy
The process of ensuring that accounts receive selling effort coverage in an effective and efficient manner.
A channel middlemen that take title to the goods that they market to end users. They typically employ their own salesforce and may carry (1) the products of only one manufacturer, (2) related but noncompeting products from different manufacturers, or (3) competing products from different manufacturers.
True or False. Distributors should not be considered final customers; however, they should be treated as customers.
A sales channel that consists of using the telephone as a means of for customer contact to perform some of or all the activities required to develop and maintain account relationships; also called telesales.
True of False. Like distributors, independent reps normally take title to the products they sell and carry inventory.
1. Provide a professional selling capability that is difficult to match with company salespeople.
2. Offer in-depth knowledge of general markets and individual customers.
3. Offer established relationships with individual customers.
4. Improved cash flow because payments to reps aren’t typically made until purchases have been paid for.
5. Provides predictable sales expenses because most of the selling costs are variable and directly related to sales volume.
6. Provide greater territory coverage because companies can employ more reps than company sales people for the same costs.
7. Companies can usually penetrate new markets faster by using reps because of the reps’ established customer relationships.
Name 7 advantages of using Independent reps.
1. the market consists of only a few buyers that tend to be concentrated in location,
2. the buyer needs a great deal of information,
3. the purchase is important,
4. the product is complex,
5. service after the sale is important
Name 5 situations that are appropriate for personal selling-driven strategies.
channel conflict
A situation that occurs when the interests of different channels are not consistent.
trade shows
A typically industry-sponsored event in which companies use a booth to display products and services to potential and existing customers.
1. Few buyers
2. Buyers concentrated geographically
3. Purchase information needs are high
4. Purchases made in large amounts
5. High-importance purchases
6. Complex products purchased
7. Post-purchase service is important
Name 7 characteristics of business target markets.
Personal Selling-Driven
Business target markets generally use ____________ Marketing Communications Strategies.
Consumer target markets generally use___________ Marketing Communications Strategies
1. Many buyers
2. Buyers dispersed geographically
3. Purchase information needs are low
4. Purchases made in small amounts
5. Low-importance purchases
6. Low-complexity products purchased
7. Post-purchase service not important
Name 7 characteristics of consumer target markets.
1. Personal – anything the salesperson brings to the job; ability to do the job & understand what they are expected to do. Role perception- Aptitude- Skill level- Motivation level
2. Organizational- anything company based, i.e. policies
3. Environmental – internal and external
What are the personal, organizational, and environmental variables that determine a salesperson’s performance? (Handout 6.1)