Chapter 1

Part One:
Strategic Planning
1-1
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Sales Management: Shaping Future Sales Leaders
Introduction to
Sales Management
Chapter 1
1-2
Learning Objectives
 Define strategy hierarchy and understand how sales and
marketing strategies affect overall strategy
 Identify different types of selling strategies and how the
selling process varies
 Describe the sales management process and
responsibilities and activities of sales managers
1-3
The Future for sales and sales force
management is pretty bright.
 Many consumer believe the sales profession not a noble endeavor.
 Business customers have a better appreciation for selling profession,
because these buyers rely on salespeople to bring them solutions to the
business problems that challenge them.
 Product knowledge, technical expertise, and business acumen are all
required to satisfy customers' needs.
 Sales positions are hardest to fill.
 Sales consumes >20% of a firm’s revenue.
 as a career opportunity, starting in sales is an excellent choice.
 Many CEOs got their start in sales.
 Sales mangers tends to earn more than their counterparts in other areas,
moreover, sales jobs will grow at much faster rate than other professions.
1-4
From Sales Rep to Sales Manager
 “Manager of people”
 Sales success is poor
predictor of success as
sales manager
 Most successful sales
reps are eventually
pressured to make the
transition to sales mgmt
“This is a decision that
must be carefully
analyzed because it’s not
an easy transition to go
from being a player to a
coach.”
1-5
What Being a Sales Manager Means
Coaching  Coaching salespeople so they can improve
 Developing strategies and delegating the

Developing responsibility for implementation to others
 Figuring out how to motivate people, some who

Motivating are older than you
 Convincing others in the organization that what is

Convincing right for the sales force is right for their
departments, too
1-6
What is Sales Management ?
• Sales Management: is the activities required to lead, direct, or supervise

the personal selling efforts of an organization.
• This textbook primary objective is to explain this function of managing

salespeople. And due to the importance of having a good strategy, this
textbook also discusses many of the day-to-day tasks that sales managers
do to further a firm’s strategy goals.
•Isn’t it important to study the selling process and selling skills?

• Yes it is extremely important, because selling is the essence of Sales
Management science. Moreover, in marketing orientated companies sales
are seen to be part of the marketing concept.
•So we will include two chapters from another textbook during our
discussion.
1-7
Important terms
What is the strategy ?
it is a plan designed to accomplish a mission.
What is the mission ?
It is a set of objectives.
- If your objective is to arrive at time to your 8 O’clock class, then what will be your
strategy to achieve this mission ( objective) ?
1-8
Establishing the Parameters of the
Firm’s Strategy: The Mission Statement
 Inspire the members of an organization
 Give purpose to their actions
 Guide their decision-making
 Serve as a standard against which decisions
can be weighed
 Once the mission’s objectives are set, strategy
can be created
1-9
Sample Mission Statements
 Everything we do is inspired by our
enduring mission:
 Coca-Cola  To Refresh the World . . . in body, mind, and spirit
 To Inspire Moments of Optimism . . . through our
brands and our actions
 To Create Value and Make a Difference . . .
everywhere we engage
 The mission of Southwest Airlines is

dedication to the highest quality of
 Southwest Customer Service delivered with a sense of
Airlines warmth, friendliness, individual pride, and
Company Spirit
1-10
The Strategy Hierarchy
 Corporate Strategy encompasses plans and goals for
the entire organization
 Address questions in a general sense, such as what
markets and sourcing options company should engage
 Ex: hire sales force vs. use distributors
 Ex: outsource mfg and focus internally on marketing
 Business units create their plans to support corporate
strategy.
 The flow of the strategy from the organizational level to
the units is called the Strategy Hierarchy.
1-11
The Strategy Hierarchy
Corporate
Strategy
Marketing Strategy
Sales Strategy
1-12
At the marketing level, planners have to answer the following
questions.
Markets  What markets do we serve with what products?
 What types of relationships do we form and with

Relationships whom?
 What level of investment will be required, and

Investment how will we locate and allocate the needed
resources?
 What are the detailed objectives and action

Objectives plans?
1-13
What Markets Do We Serve with
What Products?
 Find a sustainable competitive advantage
 Need expertise, technology or a patent.
 Sustainable competitive advantage is something that gives a company

an edge in the market overtime.
 Competitive advantage : the results of a company matching a core

competency to opportunities it has discovered in the market.
 Core competency: things a firm does extremely well, which sometime

give it an advantage over its competition.
1-14
Product-Market Grid: achieving growth via
products and markets.
Examples : new countries,

new industries.
1-15
Product-Market Grid: achieving growth
via products and markets.
Note: the risk associated with diversification are far greater
than with other market expansion approaches, why?
Simply, because it requires developing both new products and

new market.
1-16
What Types of Relationships Do We
Form and with Whom?
 Strategic plan considers network of
relationships
 Investors, potential investors, bankers
 Suppliers
 Personnel sources
 Regulatory agencies
 Relationship with customers is most
important.
 Customers’ lifetime value is worth
more than the average single
purchase. (try to extend the
relationship as much as you can.)
 A service advantage is often a
function of the quality of relationships
1-17
Customer Relationship Management
(CRM): Key Terms
 CRM: identifying and grouping customers to best acquire, retain, and grow
customers
 Sales and marketing teams are responsible for CRM
 Customer acquisition strategy: plan to obtain new customers.
- can include marketing activities such as telephone prospecting and
attending trade shows to identify potential customers.
 Customer retention strategy: plan designed to keep customers.
- might include making quarterly visits to current customers or inviting them
to technology shows to see the firm’s newest products.
 Growth strategy: plan designed to increase sales to the same customers.
- these might include offering special discounts to customers when they
make larger purchases.
1-18
Global Sales Management:
Going Global to Achieve Growth
 QuadRep’s expanding customers wanted local
Ellesmere Island Severnaya Zemlya
Arctic Ocean Arctic Ocean Franz Josef Land
Arctic Ocean
New Siberian Islands
Greenland (Den.) Svalbard (Nor.)
Banks Island Jan Mayen (Nor.) Novaya Zemlya Wrangel Island
Victoria Island Baffin Island
support in Singapore
U.S.A.
Canada
Iceland
Faroe Is. (Den.) Norway
Ireland
United Kingdom
Den.
Neth.
Sweden
Poland
Finland
Estonia
Latvia
Lithuania
Belarus
Russia 60°
Aleutian Islands (USA)
Bel. Germany
Island of Newfoundland Czech. Ukraine Kuril Islands
Slovak.
Aus. Hung. Kazakhstan
 QuadRep opened office in Singapore

Moldova Mongolia
France Switz. Slov.
Cro. Yugo.Romania
Bos. Georgia Uzbekistan
Bulgaria
North Atlantic Ocean Italy Mac.
Albania Armenia Azerbaijan
Kyrgyzstan
N. Korea
United States of America Portugal
Spain
Greece Turkey Turkmenistan Tajikistan
S. Korea Japan
North Pacific Ocean Tunisia Cyp. Leb. Syria Afghanistan North Pacific Ocean
Morocco Israel Iraq Iran China
Canary Islands (Sp.) Jordan
Kuwait Pakistan Nepal
Algeria Libya Bhu.
Egypt
 Has since followed customers across the globe,

The Bahamas Qatar
Western Sahara (Mor.)
Mexico Cuba Bang. Taiwan
Hawaiian Islands Dominican Republic Saudi U. A. E.
Arabia India Myanmar (Burma)
Oman Laos
U. S. A. Jam.
Mauritania Mali
Belize Haiti Puerto Rico (US) Dominica
Niger Eritrea
Honduras Senegal Sudan Yemen Thailand Philippines
Guatemala Chad Vietnam
Barbados The Gambia Burkina Faso
El Salvador Nicaragua Cambodia
Andaman Islands (India)
opening offices in Malaysia, China, Taiwan,

Guinea-Bissau Guinea Benin Djibouti
Trinidad and Tobago Marshall Islands
Costa Rica Côte D’Ivoire Nigeria Sri Lanka Federated States of Micronesia
Venezuela Guyana Sierra Leone Ethiopia
Panama Suriname C. A. R. Brunei Guam (USA)
Maldives
French Guiana (Fr.) Liberia Cameroon
Ghana Togo Somalia Malaysia
Colombia Eq. Guinea Uganda
Singapore
Gabon Rwanda Kenya Kiribati
Ecuador
Thailand, the Philippines, and Mexico

Galapagos Islands (Ecuador) Sao Tome & Principe Indonesia
Zaire Burundi Papua New Guinea
Solomon Islands
Congo Tanzania Seychelles
Malawi
Peru
Brazil Angola
Zambia Mozambique
Bolivia Madagascar
Namibia Zimbabwe Fiji
French Polynesia (Fr.) New Caledonia
Botswana
Paraguay Mauritius Indian Ocean
Swaziland
Australia
South Africa
Lesotho
Uruguay
South Pacific Ocean Chile Argentina South Atlantic Ocean New Zealand
Tasmania
Falkland Islands (Islas Malvinas) (adm. by UK, claimed by Argentina)
Îles Crozet (France)
South Georgia (adm. by UK, claimed by Argentina)
Source: Charles Cohon, Vice President of Research

Antarctica
of Manufacturers’ Representatives Educational
Research Foundation. He can be reached through his Web site, www.cohon.com.
1-19
Global Sales Management:
Going Global to Achieve Growth
 Empire Technical Group’s customers moved mfg and
Ellesmere Island Severnaya Zemlya
Arctic Ocean Arctic Ocean Franz Josef Land
Arctic Ocean
New Siberian Islands
Greenland (Den.) Svalbard (Nor.)
Banks Island Jan Mayen (Nor.) Novaya Zemlya Wrangel Island
Victoria Island Baffin Island
purchasing to AsiaU.S.A.
Canada
Iceland
Faroe Is. (Den.) Norway
United Kingdom
Den.
Sweden
Finland
Estonia
Latvia
Lithuania
Russia 60°
Aleutian Islands (USA)
Ireland Neth. Belarus
Germany Poland
Bel.
 ETG and several other companies formed a

Island of Newfoundland Czech. Ukraine Kuril Islands
Slovak.
Aus. Hung. Moldova Kazakhstan
France Switz. Slov. Mongolia
Cro. Yugo.Romania
Bos. Georgia Uzbekistan
Bulgaria
North Atlantic Ocean Italy Mac.
Albania Armenia Azerbaijan
Kyrgyzstan
N. Korea
United States of America Portugal
Spain
Greece Turkey Turkmenistan Tajikistan
S. Korea Japan
North Pacific Ocean
consortium and included Asian partners where

Tunisia Cyp. Leb. Syria
Iraq
Afghanistan
China North Pacific Ocean
Morocco Israel Iran
Canary Islands (Sp.) Jordan
Kuwait Pakistan Nepal
Algeria Libya Bhu.
The Bahamas Egypt
Western Sahara (Mor.) Qatar
Mexico Cuba Bang. Taiwan
Asia/Pacific resources were required

Hawaiian Islands Dominican Republic Saudi U. A. E.
Arabia India Myanmar (Burma)
Oman Laos
U. S. A. Jam.
Mauritania Mali
Belize Haiti Puerto Rico (US) Dominica
Niger Eritrea
Honduras Senegal Sudan Yemen Thailand Philippines
Guatemala Chad Vietnam
Barbados The Gambia Burkina Faso
El Salvador Nicaragua Cambodia
Guinea-Bissau Guinea Benin Djibouti Andaman Islands (India)
Trinidad and Tobago Marshall Islands
Costa Rica Côte D’Ivoire Nigeria Sri Lanka Federated States of Micronesia
Venezuela Guyana Sierra Leone Ethiopia
Panama Suriname C. A. R. Brunei Guam (USA)
 Became opportunity to pursue contracts to build

Maldives
French Guiana (Fr.) Liberia Cameroon
Ghana Togo Somalia Malaysia
Colombia Eq. Guinea Uganda
Singapore
Gabon Rwanda Kenya Kiribati
Galapagos Islands (Ecuador) Ecuador Sao Tome & Principe Indonesia
Zaire Burundi Papua New Guinea
Solomon Islands
Congo Tanzania Seychelles
entire assemblies as well as just parts

Malawi
Peru
Brazil Angola
Zambia Mozambique
Bolivia Madagascar
Namibia Zimbabwe Fiji
French Polynesia (Fr.) New Caledonia
Botswana
Paraguay Mauritius Indian Ocean
Australia
 Morphed into international design and assembly

Swaziland
South Africa
Lesotho
Uruguay
South Pacific Ocean Chile Argentina South Atlantic Ocean New Zealand
house, controlling manufacturing of complete Falkland Islands (Islas Malvinas) (adm. by UK, claimed by Argentina)
Îles Crozet (France)

Tasmania
assemblies, turning “a $3 (part) sale to a $103 sale”

South Georgia (adm. by UK, claimed by Argentina)
Source: Charles Cohon, Vice President of Research

Antarctica
of Manufacturers’ Representatives Educational
Research Foundation. He can be reached through his Web site, www.cohon.com.
1-20
What Level of Investment Will Be Required, and
How Will We Allocate the Needed Resources?
 Money, human or social capital
 Human capital : refers to the people that make up an organization.
 Human capital decisions include:
 Determining number of salespeople
 What skills and experience they must have
 What training they require
 Other decisions include:
 Whether to hire telephone prospectors or to outsource
 Who handles customer service (a sales rep or a customer service rep).
1-21
What Level of Investment Will Be Required,
and How Will We Allocate the Needed
Resources?
 Social capital: refers to the ties that a firm has with others, which can
also be drawn upon as a resource.
 In other word, social capital is who owes you favor or who can be
asked a favor.
 Look at the example on page 10.
1-22
What Are the Detailed Objectives and
Action Plans?
 Remember that mission statements do not answer questions about
what to produce or markets we should serve.
 Nor they answer questions about the firm’s objectives and plans.
 These objectives and plans become more specific at the marketing

and sales strategies levels ( business unit strategies.)
1-23
Action Plans?
 SMART format for establishing objectives
S pecific
Measurable
A chievable, yet challenging
R ealistic
T ime-based
-Milestones are important short-term objectives, can help mark a
companies progress toward achieving its objectives.
-They also can be used to also determine when the plan is off course so
that adjustments can be made.
1-24
Action Plans?
 Moreover, a good strategic plan has a detailed action plans, or
steps, that will be taken in order to accomplish those objectives.
- who will undertake each activity?
- when the activity will occur?
 At this point the firms strategy begins to involve salespeople and
sales process.
1-25
Self-Assessment Library
 Go to http://www.prenhall.com/sal/
 Access code came with your book
 Click the following
 Assessments
I. What About Me
C. Motivation Insights
5. What Are My Course Performance Goals?
1-26
Selling Approaches: grouping buyers
by how they make decisions.
 Finish sale as quickly and as easily as possible
 Key to success is making as many calls as possible to as
Transactional many people as possible.
 Little thought is given to the lifetime value of customers.
 Based on the friendship between the salesperson and the

Affiliative individual buyer. Example : if all products buyer
considering are the same, but post-sales service is
critical, then the buyer will be more inclined to purchase
from a friend who can be counted upon.
 Identify and solve a client’s problems
Problem Solving  Also called needs-satisfaction selling or problem/solution
or Consultative selling.
 Involves asking questions in order to determine customers
needs and then presnting solutions.
 Business-to-business (B2B) concept
Enterprise  Based on not only person-to-person relationships but on
company-to-company relationships
1-27
Enterprise Selling:
•is a business-to-Business concept that reflect, at its best, a strategic
partnership between the buying and selling organization.
•It is called enterprise selling because it is based on not only person-to-

person relationship but on company-to-company relationships.
•For every customer there is salesperson; called account manager; that is

responsible on managing the relationship with a business customer.
•When engaged in enterprise selling, a salesperson will, at times, utilize

affiliative selling, transactional selling, and consultative selling all within an
enterprise-level strategy.
1-28
The Selling Approach: 8 Steps
1-29
Prospecting
 Prospecting involves identifying potential
customers for a particular product or service
 A prospect is a MAD buyer
 the Money to spend
 the Authority to buy
 the Desire to buy it
1-30
Pre-Approach
 During Pre-Approach, the salesperson tries to
learn everything he can about the account
 Can take a significant amount of time
1-31
Approach
 Approach: salesperson asks buyer to commit to
a meeting
 Opening statement must get buyer’s attention
1-32
Needs Identification
 Needs identification: salesperson confirms
prospect is MAD (Money, Authority, Desire)
 Comprised of 3 elements
1
Questioning
2
Identification
3
Pre-commitment
1-33
Presentation
 Presentation: salesperson describes product
and how it meets buyer’s needs
Feature Evidence
Benefit Agreement
1-34
Handling Objections
 Objections: reasons a buyer offers to not buy
your product
 Can occur at any time
 Salesperson should find out root
of concern and resolve it
1-35
Closing the Sale
 Close: when salesperson asks buyer for the sale
 Good close
 Reinforce decision to buy
 Confirm implementation schedule
 Thank the buyer
 Ask for referral
1-36
Implementation/Follow-Up
 Follow-Up: After delivery, ensure that the
customer has good experience with product
 Training, service, policies and procedures
1-37
Selling Process vs. Selling Approach
Selling Approach Selling Process
Transactional Prospecting
Affiliative
Consultative
Closing Presenting
Enterprise
1-38
Sales Leaders
1-39
Sales Executive
 Devise sales plan to meet strategic objectives

Plan  Develop general strategies that specify sales
approach
 Determine type of sales force

Organize  Create hiring and training policies and strategies
 Communicate and roll out the plan

Implement  Create the right culture
 Choose a compensation model
 Sales and customer satisfaction
Monitor  Salesperson recruitment, selection, training
 Take corrective action as necessary
1-40
Field Sales Manager
 Plans, organizes, implements, and monitors for
specific sales team
 Salespeople report to Field Sales Manager
 Primary responsibility is sales quota
 Responsible for training and motivating
salespeople
1-41
Sales Executive vs.
Sales Manager Duties
Activity Sales Executive Sales Manager
Set overall sales targets for Set quotas for each
Plan each product salesperson for each product
Decide what type of people to Interview and hire specific

Organize hire for sales positions people for sales positions
Identify each person’s

Determine the compensation motivators and find ways to
Implement plan reward good performance for
each person
Track sales by region; take Observe each salesperson’s

corrective action such as actions in the field and offer
Monitor additional training if sales are suggestions for their
too low improvement
1-42
Ethics in Sales Management:
Maintaining NCR’s Ethical Sales Culture
We … recognize that selling

only works when everything is
right for the customer—when
we deliver value
—Rick Makos
President, NCR-Canada
1-43
Role Play: T&G Supply
 Opportunity 1: T&G Supply
 Provides maintenance, repair, and operations items to
manufacturers
 Janitorial products, hardware products to fix machines,
and other common maintenance products
 Opportunity 2: Columbia Leasing
 Car rental and leasing company
 Your job is to sell corporate contracts
1-44
Role Play (continued): Action Steps
 Break into pairs
 Each person picks 1 company to play sales mgr
 Think about issues that reflect a service-
dominant logic in each situation
 Using other concepts discussed in the chapter,
identify three characteristics that you would want
each new salesperson to have
 Take turns interviewing your partner for a sales
position
1-45
Caselet 1.1:
Killebrew Manufacturing
 Makes plastic patio products
 Widow Francine took over company
 Annual growth rate ~5% for past 20 years
 Trying to grow company
 10% introductory discount
 Makes prices same as biggest competitor
 Killebrew quality is much better
 Problem: Few new accounts are reordering
 Are salespeople too quick to sell price, not quality?
1-46
Caselet 1.1 (continued):
What Would You Do?
 Quality must be demonstrated and sold
 What sales process or approach should Francine
consider?
1-47
Caselet 1.2:
Morton’s Ice House
 Grill and microbrewery
 Owner Sherry Morton hired Trey Denton to sell
franchises
 Trey sold 12 franchises in 1 year
 Corporate goal is to sell 200 franchises in next 2
yrs
 Hired 5 salespeople for Trey to manage
1-48
Caselet 1.2 (continued):
What Would You Do?
 Problems
 Salespeople calling on same prospects
 Other prospects not being called on
 Sold only 22 franchises in 6 months
 2 salespeople quit
 10 franchises want out of contracts
 What should Sherry do?
1-49
All rights reserved. No part of this publication may be reproduced, stored in
a retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

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Part One:

Coaching  Coaching salespeople so they can improve

 Developing strategies and delegating the

 Figuring out how to motivate people, some who

 Convincing others in the organization that what is

• Sales Management: is the activities required to lead, direct, or supervise

• This textbook primary objective is to explain this function of managing

•Isn’t it important to study the selling process and selling skills?

it is a plan designed to accomplish a mission.

What is the mission ?

 The mission of Southwest Airlines is

Markets  What markets do we serve with what products?

 What types of relationships do we form and with

 What level of investment will be required, and

 What are the detailed objectives and action

 Need expertise, technology or a patent.

 Sustainable competitive advantage is something that gives a company

 Competitive advantage : the results of a company matching a core

 Core competency: things a firm does extremely well, which sometime

Examples : new countries,

Simply, because it requires developing both new products and

 QuadRep opened office in Singapore

 Has since followed customers across the globe,

opening offices in Malaysia, China, Taiwan,

Thailand, the Philippines, and Mexico

Îles Crozet (France)

South Georgia (adm. by UK, claimed by Argentina)

Source: Charles Cohon, Vice President of Research

 ETG and several other companies formed a

consortium and included Asian partners where

Asia/Pacific resources were required

 Became opportunity to pursue contracts to build

entire assemblies as well as just parts

 Morphed into international design and assembly

Îles Crozet (France)

assemblies, turning “a $3 (part) sale to a $103 sale”

Source: Charles Cohon, Vice President of Research

 These objectives and plans become more specific at the marketing

 Based on the friendship between the salesperson and the

•It is called enterprise selling because it is based on not only person-to-

•For every customer there is salesperson; called account manager; that is

•When engaged in enterprise selling, a salesperson will, at times, utilize

 Devise sales plan to meet strategic objectives

 Determine type of sales force

 Communicate and roll out the plan

Decide what type of people to Interview and hire specific

Identify each person’s

Track sales by region; take Observe each salesperson’s

We … recognize that selling

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