CRAVENS

PIERCY

8/e
McGraw-Hill/Irwin

2006 The McGraw-Hill Companies, Inc., All

13-2

Chapter Thirteen
Sales Force,
Internet, and
Direct Marketing
Strategies

McGraw-Hill/Irwin

2006 The McGraw-Hill Companies, Inc., All

13-3

SALES FORCE,
INTERNET, AND DIRECT
MARKETING
STRATEGIES

Sales Force
Strategy
Internet Strategy
Direct Marketing
Strategies

13-4

OFFICE DEPOTS
SUCCESSFUL INTERNET
STRATEGY

Using a seamless network, Web operations are

integrated into Office Depots existing
businesses.
An easy-to-use electronic link is provided
between the
online store and internal networks.
Purchasing authorizations and limits are
incorporated
into the system.
Ease of use rather than technology is the key
priority
for improving the online network.
Bonuses are offered to salespeople to encourage
corporate customers to use online ordering.
Sales applicants are tested concerning Internet
familiarity, and informed of the importance of
Office
Depots online initiatives during the hiring
Source: Charles Haddad, Office Depots E-Diva, Business Week e.biz, August 6, 2001,
EB22-EB24.
process.

13-5

DESIGNING AND
IMPLEMENTING SALES
FORCE STRATEGY

A companys sales force

strategy determines how

the organization will use
the personal selling
function to maintain
contact with customers and
develop the relationships
that management wants in
order to achieve marketing
and promotion objectives.

Sales Force Strategy

13-6

Determine the
role of the sales
force in
promotion
strategy
Define the selling
process (how selling
will be accomplished)
Decide if and how
alternative sales channels
will be utilized
Design the sales
organization
Recruit, train, and manage
salespeople

Evaluate performance
and make adjustments
where necessary

Challenges in Selling
and Sales
Management
Two sets of
ethical dilemmas are of particular

13-7

concern to sales managers. The first set is

embedded in the managers dealings with the
salespeople. Ethical issues involved in
relationships between a sales manager and the
sales force include such things as fairness and
equal treatment of all social groups in hiring and
promotion, respect for the individual in
supervisory practices and training programs,
and fairness and integrity in the design of sales
territories, assignment of quotas, and
determination of compensation and incentive
rewards. Ethical issues pervade nearly all
aspects of sales force management.
The second set of ethical issues arises from the
interactions between salespeople and their
customers. These issues only indirectly involve
the sales manager because the manager cannot
always directly observe or control the actions of
every member of the sales force. But managers
have a responsibility to establish standards of
ethical
behavior
for
theirSales
subordinates,
Source:
Mark W.
Johnston and Greg
W. Marshall,
Force Management, 7 ed., Burr
Ridge, IL: McGraw-Hill/Irwin, 2003, 21.
communicate them clearly, and enforce them
th

13-8

Business and
Marketing Strategy
Influences on Sales
Strategy
Business
Strategy
Promotio
n
Strategy

SALES
STRATEGY
Pricing
Strateg
y

Market
Target(s
)
Strategy

Product
Strategy
Distribution
Strategy

13-9

Marketing
productivity
crisis

Escalating
customer
expectations

Intense
global
competitio
n

SALES FORCE
CHALLENGES

Blurring of
industry
boundaries

Technology
Advances

Mergers
and
acquisitio
ns

Range of Personal
Selling Roles
Transactional
Selling

Feature/Benef
t Selling

Solution
Selling
Value-Added
Selling

13-10

DEFINING THE
SELLING PROCESS

13-11

Finding Prospects

Opening the
Relationship
Qualifying the
Prospect
Presenting the
Sales Message

Closing the
Sale
Source: Mark W. Johnston and Greg W. Marshall,
Sales Force Management, McGraw-Hill/Irwin, 2003,
51-56.

Servicing
the Account

13-12

As radical change sweeps through

todays marketplace, managers face
daunting questions about just how to
adapt. Most of those questions focus
on the structure and deployment of
sales forces: What is the right mix of
outside salespeople, inside reps,
independent reps, brokers,
telemarketers, and support staff? Are
sales reps even necessary? Or can
they be replaced by 800 numbers,
catalogs, shopping channels, or the
Internet?

James Champy, Strategy Session, SAMM, 1997, 32.

13-13

The Selling Process

Guides

Recruiting

Training

Effort Allocation

Organizational
Design

Selling Support
Activities

13-14

Selecting Sales
Channels to Value
Chain Members and
End Users

Major Account
Management

Field Sales Force

Telemarketing

Electronic/Mail Contact

13-15

DESIGNING THE SALES

ORGANIZATION
Organizational
Structure

Deployment of
Selling Effort

Sales Force
Deployment

13-16

Size of the Sales Force

Allocation of Selling Effort
Sales person skills and effort
PLUS
Market potential
Number and location of
customers
Intensity of competition
Market (brand) position of
the company

13-17

Alternative Designs
Customer needs
different

Market-Driven
design

Product/ MarketDriven design

Simple
product
offering

Complex
range of
products

GeographyDriven design

ProductDriven design

Customer needs
similar

Selecting an
Organizational
Design

13-18

What is the selling job?

How much customer/product
specialization is necessary?
Role of value chain (channel)
relationships?
How many sales management levels
(hierarchy versus process)?
Will sales teams be used?
Sales channels in addition to the field
sales force?
Are there any sales structure danger
signals (high costs, turnover, large
sales variations across territory?

13-19

Sales Force Size

Example
Sales

$ millions

40
35

Current
level

30

Maximum profit
contribution level

25
20
Gross profit
contribution

15
10
Selling
expense

5
0
60

70

80

90 100 110

Number of salespeople

13-20

MANAGING THE
SALES FORCE

Finding and
Selecting
Salespeople

Training/Developme
nt

Management Control
Monitoring
Directing
Evaluating
Rewarding

The Swiss Drug Maker

Novartis Strengthens
Sales Force Capabilities

13-21

Novartis 1999 sales growth was

very low compared to rivals
double-digit sales increases. Top
management launched a major
turnaround strategy, spearheaded
by new product initiatives and
strengthening
of provided
the sales
force.
Salespeople were
customer

research information to focus their

targeting
efforts.
The size of the sales force was
increased
from 2,815 to 6,200 in 2002.
Collaboration and persistence were
determined to be key traits of high
performance Novartis salespeople.
Major efforts were initiated to upgrade
Source: New Prescription: Its Rivals in Funk, Novartis Finds a Way to Thrive, The Wall Street
the August 23, 2002, A1 and A5.
Journal,
sales force and improve selling and

SALES FORCE
EVALUATION AND
CONTROL
Performance
Measures

Performance
Standards
Activities Focus of Management
Control and/or Outcomes

13-22

13-23

REINVENTING THE
SALES ORGANIZATION

A
Te pp
ch ly
no ing
lo
gy

Performance
Huddles

Customer
Relationships
Co

SALES
MANAGER
CHALLENGES

er
m ls
o
t ne
s
n
Cu ha
C

ng
i
h
ac

Sales
Structure

Re In
la ter
tio n
ns al
hi
Keeping
ps
Score

13-24

INTERNET STRATEGY

Strategy Development

Internet Objectives

E-Commerce Strategy

Value Opportunities and

Risks

Measuring
Effectiveness

The Future of the

Internet

Internet Strategy
Alternatives

13-25

Promotional
Medium

Communication
Tool

Value-Chain
Channel

Separate
Business Model

13-26

Deciding Internet
Objectives

Creating Awareness
and Interest

Information
Dissemination

Obtaining Research
Information

Brand Building

Improving Customer
Service

DESIGNING THE
STRATEGY
1. Customer Groups
Targeted
2. Value Proposition
3. Communications
Strategy
4. Designing the Website
5. Structure of the
Organization
6. Alliance Partners
7. Shareholder Value
Source: J. F. Rayport and B. J. Jaworski, e-Commerce, McGraw-Hill/Irwin, 2003, 12.

8. Tracking Performance

13-27

Measuring Internet
Effectiveness

13-28

Challenging but
capabilities are
developing.
What should be measured
and how?
Major changes are likely
through trial and error.
Alternative measures:
Ad impressions, clicks,
unique visitors, total
visits, page impressions

13-29

DIRECT MARKETING

Kiosk
Shopping

Electronic
Shopping

Radio/Magazine
/
Newspaper

Catalogs

DIRECT
MARKETING
METHODS

Direct Mail

Telemarketing
Television

Advantages of
Direct Marketing

13-30

Socio-economic Trends
Time constraints/
convenience
Low Access Costs
Much lower than face-to-face
contact
Data Base Management
Facilitates direct marketing
initiatives
Value
An attractive bundle of value