CRAVENS

PIERCY

8/e
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
 13-2

Chapter Thirteen

Sales Force,
Internet, and
Direct Marketing
Strategies

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.

 13-3

SALES FORCE, INTERNET,

AND DIRECT MARKETING
STRATEGIES

 Sales Force Strategy

 Internet Strategy
 Direct Marketing
Strategies
 13-4

OFFICE DEPOT’S
SUCCESSFUL INTERNET
STRATEGY
 Using a seamless network, Web operations are
integrated into Office Depot’s 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
Depot’s online initiatives during the hiring process.
 Office Depot’s Internet-sourced sales have increased
at double digit rates from $1 billion in 2000. The online
business was profitable in its first year.

Source: Charles Haddad, “Office Depot’s E-Diva,” Business Week e.biz, August 6, 2001, EB22-EB24.
 13-5

DESIGNING AND
IMPLEMENTING SALES
FORCE STRATEGY
A company’s 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.
 13-6

Sales Force Strategy

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
 13-7

Challenges in Selling and

Sales Management
Two sets of ethical dilemmas are of particular concern
to sales managers. The first set is embedded in the
manager’s 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 their subordinates,
communicate them clearly, and enforce them
vigorously.
Source: Mark W. Johnston and Greg W. Marshall, Sales Force Management, 7th ed., Burr Ridge, IL:
McGraw-Hill/Irwin, 2003, 21.
 13-8

Business and Marketing

Strategy Influences on
Sales Strategy

Business Strategy

Promotion
Market
Strategy
Target(s)
Strategy
SALES
STRATEGY
Pricing Product
Strategy Strategy

Distribution Strategy
 13-9

Escalating
customer
expectations
Marketing Intense
productivity global
crisis competition

SALES FORCE
CHALLENGES

Mergers
and
Blurring of
acquisitions
industry
boundaries
Technology
Advances
 13-10

Range of Personal
Selling Roles

Transactional
Selling

Feature/Benefit
Selling

Solution Selling

Value-Added
Selling
 13-11

DEFINING THE
SELLING PROCESS
Finding Prospects

Opening the
Relationship

Qualifying the Prospect

Presenting the Sales

Message

Closing the Sale

Source: Mark W. Johnston and Greg W. Marshall, Sales Servicing the

Force Management, McGraw-Hill/Irwin, 2003, 51-56.
Account
 13-12

As radical change sweeps through

today’s 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
 13-16

Sales Force
Deployment
 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 Product/ Market-

design Driven design

Simple Complex
product range of
offering products

Geography- Product-
Driven design Driven design

Customer needs
similar
 13-18

Selecting an
Organizational
Design
 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

40

35 Current
level

30 Maximum profit
contribution level
$ millions

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/Development
 Management Control
Monitoring
Directing
Evaluating
Rewarding
 The Swiss Drug Maker
13-21

Novartis Strengthens
Sales Force Capabilities
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 the sales force.
 Salespeople were provided 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 the
sales force and improve selling and product
training.
Source: “New Prescription: It’s Rivals in Funk, Novartis Finds a Way to Thrive,” The Wall Street Journal,
August 23, 2002, A1 and A5.
 13-22

SALES FORCE
EVALUATION AND
CONTROL
Performance
Measures

Performance
Standards

Activities Focus of Management

Control and/or Outcomes
 13-23

REINVENTING THE SALES

ORGANIZATION

Customer
A Relationships
Te pp
ch lyi
no ng hin g
ac
lo
gy Co
SALES
Performance MANAGER Sales
Huddles CHALLENGES Structure

er Re I n
la ter
t om els tio na
u s nn ns l
C ha hi
C 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
 13-25

Internet Strategy
Alternatives
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
 13-27

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
8. Tracking Performance
Source: J. F. Rayport and B. J. Jaworski, e-Commerce, McGraw-Hill/Irwin, 2003, 12.
 13-28

Measuring Internet
Effectiveness

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 Catalogs

Electronic DIRECT
MARKETING Direct Mail
Shopping
METHODS

Radio/Magazine/ Telemarketing
Newspaper
Television
 13-30

Advantages of
Direct Marketing
 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