INTRODUCTION TO

SALES MANAGEMENT
IN THE TWENTY –
FIRST CENTURY
Chapter 1
 Chapter One Outline
 Drivers of Change in Sales Management
 What is Sales Management
 The Selling Process
 The Sales Management Process
 The Impact of the External Environment on Sales
Management
 The Impact of the Internal Environment of Sales
Management
Development and Role of selling in Marketing
 Three major drivers of change in Sales
Management

 Innovation
 Technology

 Leadership
 Innovation
 Innovation- willingness to think outside the box, do
things differently, and embrace change
 A move from transactional selling to relationship
selling.
 A strategic relationship with the best and most
profitable customers and a transaction-based
relationship with other customers.
 Shell oil – used Telemarketing
 Technology
 Effects of Technology on Personal Selling
 Laptops computers- Salespeople can have access to
large customer databases and records very quickly.
 Cellular phones- Salespeople can communicate
regularly with their customers.
 iPads- show customers a video about products
 The Internet-Company websites
 Electric Data Interchange (EDI) – Low inventory
system will reorder
 Just in time delivery and CRM system
 Leadership
 Fewer layers of management.
 More responsibility is given to salespeople.
 Leader instead of Manager
 The effective leadership of sales people involves:
 1. Communicating rather than controlling
 2. Becoming a cheerleader and coach instead of a supervisor
or boss.
 3. Empowering sales people to make decisions instead of
directing them.
 Sales Management is a Global Endeavor

 Ease of communication has opened new markets.

 Significant growth can be found outside a company’s
home country.
 Companies have global customers.
 Changes in the way a sales force is managed
includes:
 More diverse sale force
 More environmental factors (cultural, legal, behavioral)
 Ethics
 Ethics is concerned with the development of
moral standards by which actions and
situations can be judged.
 More focus on ethics in sales management

 Ethical training for salespeople (reduce

penalties on companies)
 More policies encouraging ethical behavior

 Relationship selling requires more ethical

behavior than transactional selling.

 What is Sales Management
 Sales Management is all activities, processes, and
decisions involved in managing the sales function in
an organization.
 Managing a sales force well involves understanding
the complexity of selling activities as well as the
decisions involved in managing those activities.
 Selecting the right people.
 Well trained sales force.
 Managing sales force is a dynamic process.
Sales Management Activities
 The Selling Process
 There is a misconception about the selling process.
 Various selling jobs require different skills and

abilities
Example: General Electric GE
 1. Different buying processes and needs in various

markets.
 2. Different levels of product complexity.
Question
 Does the Internet replace the need for salespeople?
In what situations is the Internet most likely to
replace salespeople? What characteristics of a
situation would make the Internet least likely to
replace salespeople?
 Sales Management Process
 The formulation of a sales program
 The implementation of the sales

program
 The evaluation and control of the

sales program.
 The formulation of a Sales
Program
 Consider the environmental factors
faced by the firm.
 Integrate selling efforts with other

elements of the firm’s marketing

strategy.
The Implementation of the Sales Program

 Selecting appropriate sales personnel.

 Designing and implementing

approaches that will direct the sales

force effort towards desired
objectives.
 1000 unit a month.
 The Evaluation and Control of the Sales
Program

 Developing methods for monitoring and

evaluating sales force performance
through appropriate metrics.
 Adjustment of the sales program when

performance is unsatisfactory.
 Impact of External Environment on
Sales Management
 Economic Environment
 Legal and Political Environment

 Technological Environment

 Social and Cultural Environment

 Natural Environment
 The external environment is beyond the control of individual
manager but companies can try to influence it. Example- energy
prices, technology advances, government regulation, social.
 Economic Environment
 1. Demand for a product in a country depends on a
country’s economic conditions such as:
 Growth
 Unemployment rate
 Level of inflation
 Economic Environment
 2. The existing distribution structure in an industry.
 The number, types , and availability of wholesalers,
retailers, and other intermediaries can affect the
company’s ability to distribute its products.
 Personal selling tries to persuade such
intermediaries to stock and provide marketing
support.
 Economic Environment
 3. Amount of competition in the firm’s industry both in terms
of the number of companies and their strengths.
 A company should use its marketing and sales programs to
differentiate itself from its competition.
 Salespeople are usually the first to observe changes in
competitors’ strategies and activities.
 Salespeople are important when exploring market
opportunities in other countries.
 When selling in a foreign country, accurate and reliable
market information may be more important than in
domestic marketing.
 Legal and Political Environment
 Laws regulating the conduct of business has
increased dramatically.
 Three types of laws are important to sales
programs:
 1. Antitrust laws-Restrict marketing activities that
would tend to reduce competition and give one
company a monopoly through unfair competition.
 Legal and Political Environment
 2. Consumer protection-are aimed at protecting
consumer welfare by setting standards of quality
and safety.
 Companies must provide consumers with accurate
information about their products.
 Legal and Political Environment
 3. Equal employment opportunity-It is unlawful to
discriminate against a person in either hiring and
promotion because of race, religion, nationality,
gender, or age.
 Technological Environment
 Rapid development of new products.
 Improvement in transportation, communication,
and data processing
 Laptop computers
 Telemarketing
 Teleconferencing
 Computerized reordering
Development and Role of Selling
in Marketing
Question
 Briefly discuss the three "new-age" themes of sales
management in the 21st century.
 Innovation,
 technology
 and leadership.
Question
 How is ethics different from laws?
 A particular action may be legal but not ethical.
Ethics is more proactive than the law.
 Q: Which of the following statements about sales force
management is true?
 A. The sales force is the firm's most direct link to the
customer
 B. The statement, "The world will beat a path to your door if
you build a better mousetrap," reflects how business operates
today
 C. As organizations implement the marketing concept, they
soon realize how important it is to be sales-oriented
 D. Personal selling is usually less expensive than advertising
 E. Sales management is no different from any other kind of
management
 A
 Social and Cultural Environment:
Ethics
 Two sets of ethical dilemmas are of particular concern to
sales managers:
 1. The sales manager’s dealings with salespeople
 Equal treatment of all social groups in hiring and promotion
 Respect for the individual in supervisory practices and training programs
 Fairness and integrity in the design of sales territories, assignment of quotas and
determination of compensation and incentive rewards.
 Quotas: Are individual sales target figure assigned to each sales unit such a sales person,
dealer, territory, as a required minimum for a specified period (month, quarter, year).


 Social and Cultural Environment:
Ethics
 2. The interaction between salespeople and
customers.
 Impose ethical standards to guide salespeople’s
dealings with customers
 Develop written policies that address what to do in
situations where ethical issues arise
 Particular action may be legal but not ethical?
 Ethics is more proactive than the law?
 Natural Environment
 The natural environment is the source of all the raw
materials and energy resources needed to make,
package, promote, and distribute the product.
 Resources or energy shortages may limit sales of
products.
 So the dilemma here is how to retain the customers
during the shortage.
 Natural Environment
 De-marketing-efforts at discouraging demand for a product. This
can be done using the following methods:
 1. Increase price
 2. Decrease promotion
• 3. Rationing is the controlled distribution of scarce resources, goods, or
services.
 Growing social concern about the negative impacts of the products
and production process on the natural environment affects
marketing and sales programs.
 Reusing and recycling materials is now required by some countries.
 Can you Identify other environmental issue that impact the
salesforces and sales managers?
Internal Environments
 Internal Environment
1) Goals, Objectives and Culture

2) Human Resources

3) Financial Resources

4) Production and Supply Chain Capabilities

5) Service Capabilities

6) R&D Development and Technological Capabilities

 Goals, Objectives and Culture
 Company mission and objectives should be customer-
centric.
 A well-defined mission with a top management’s value and
beliefs leads to strong corporate culture.
 What is corporate culture?
 Corporate culture refers to the shared values, attitudes,
standards, and beliefs that characterize members of an
organization and define its nature.
 A strong corporate culture shapes the attitudes and actions of
employees and determines the kinds of plans that can be
implemented.
 Human Resources
 Problems with the success factors needed for relationship
selling:
 Difficult to recruit highly qualified salespeople for sales positions
 Lengthy training programs needed to increase salespeople
knowledge and skills so that they will be effective in their
relationship selling roles
 It is difficult to expand sales force quickly to take advantage of
new products or growing markets
 Use distributors’ sales force when entering new markets especially
foreign markets ( goals accomplish quickly with pre-existing sales
force) .
 Financial Resources
 The financial strength of the organization
influences many aspects of its customer
relationship programs such as:
 The firm’s ability to develop new value-adding
products
 The size of the promotional budget
 The size of the sales force
 How do companies obtain financial resources to
realize their full potential in the marketplace?
 Production and Supply Chain
 Production factors that have influence on
relationship selling initiatives are:
 Production capacity
 Technology
 Location of the production faculties
(Transportation costs)
 Equipment in a company’s plant
 The relationship with suppliers
 Service Capabilities
 The ability to deliver high service quality:
 Leads to a strong competitive advantage
 Makes it difficult for other firms to compete for the
same customers
 Makes it difficult for customers to switch to a
competitor, despite the price advantages that a
competitor may offer.
 Research &Development (R&D)
 Technological and engineering expertise are
important factors in determining whether the
company will be an industry leader or follower in
both the development of value adding products and
high quality service delivery.
 Customers are attracted more to innovators and
industry leaders.
 Companies are investing in technology so that they
can use technological sophistication as a
competitive advantage.
 Reference
 Johnston & Marshall (2016) , Sales Force
Management, 12th edition, Routledge, International
Edition.