Lecture Dalrymple''s sales management: Concepts and cases – Chapter 2: Strategy and sales program planning

After studying this chapter, you should be able to: Describe the major elements of business strategy, state the basic elements of strategic marketing planning, explain what is meant by strategic implementation process decisions, describe the purpose of a sales force program and list its major elements, tell what an account relationship strategy is and explain its purpose.

Part I THE BIG PICTURE Chapter 2: Strategy and Sales Program  Planning LEVEL Top Management Decisions LEVEL 2 Strategy Implementation Decisions LEVEL 3 Sales Force Program Decisions Business Business Strategy Strategy Marketing Marketing Strategy Strategy Go­to­Market Strategy Supply Chain  Management (SCM) Customer Relationship Management (CRM) Product Development Management  (PDM) Str cess o r uct  P e s s e ure l Sa tiviti Account Relationship Ac Com pet en Strategy cies Figure 2­1  The Sales Force Decision Sequence Lea sh de r ip Environmental constraints Environmental constraints    Legal & regulatory    Legal & regulatory    Demographics    Demographics    Economic Conditions    Economic Conditions    Technology    Technology    Competitive conditions    Competitive conditions    Sociocultural factors    Sociocultural factors Distinct competencies Distinct competencies    Marketing    Marketing    Financial    Financial    Technology    Technology    Information    Information Strategic Management Strategic Management Planning Planning Resources Resources    Financial    Financial    R&D    R&D    Personnel    Personnel    Brand Equity    Brand Equity    Production    Production Firm’s history Firm’s history management culture management culture Figure 2­2:  Factors Influencing Strategic Management Corporate goals Corporate goals Increase shareholder wealth by 10% Increase shareholder wealth by 10% Business unit objectives Business unit objectives 12% revenue growth 12% revenue growth Grow pre­tax profits by 18% Grow pre­tax profits by 18% Marketing objectives Marketing objectives Increase product A’s market share by 2 points Increase product A’s market share by 2 points Grow contributions after sales & marketing by 20% Grow contributions after sales & marketing by 20% Sales department objectives Sales department objectives Achieve sales revenue of $210 million Achieve sales revenue of $210 million Grow contributions after sales expenses by 25% Grow contributions after sales expenses by 25% Sales district objective Sales district objective Achieve sales revenue of $10.5 million in product A Achieve sales revenue of $10.5 million in product A Obtain $7 million contributions after direct selling Obtain $7 million contributions after direct selling Salesperson objective Salesperson objective Achieve sales revenues of $1.2 million in product A Achieve sales revenues of $1.2 million in product A Obtain $0.8 million in gross margin dollars Obtain $0.8 million in gross margin dollars Major account objective Major account objective Achieve sales revenues of $95,000 in product A Achieve sales revenues of $95,000 in product A Obtain an average gross margin of 80% Obtain an average gross margin of 80% Figure 2­3:  Hierarchy of Sales Objectives   Low  Cost Strategy:  High Profit Sales Programs:    Vigorous pursuit of cost reductions from  experience and tight cost control                   Differentiation strategy:    Creating an offering perceived as being  unique leading to high brand loyalty and  low price sensitivity.  Niche Strategy:    Servicing a target market very well,  focusing all decisions with the target  market needs in mind, dominating sales  with the segment.    Extensive use of independent sales agents  Focused on transactional customer  relationships  Structured so that managers supervised a  large number of salespeople  Compensation was largely incentive based  Salespeople were evaluated primarily on their  sales outcome performance  High Profit Sales Programs:      Selective use of independent sales agents  Focused on long­term customer relationships  Structured so that managers intensely  supervised a limited number of salespeople  Compensation was largely salary based  Salespeople were evaluated on their behaviors  as well as their outcomes.  High Profit Sales Programs:    Experts in the operations and opportunities  associated with a target market.  Otherwise the  firm adopted the program characteristics  associated with the appropriate value creation  strategy above.      Figure 2­ 4:  Business Strategies and High Profit Sales Force Programs  Steps in Developing a Go-to-Market Strategy What is the best way to segment the market? What are the essential activities required by  each segment? What group of go­to­market participants  should perform the essential activities? Which face­to­face selling participants should  be used? Figure 2­5: Figure 2­6  Essential Activities Interest Creation Post­Purchase Pre­Purchase Purchase Figure 2­7  Potential Go­to­Market Participants Customers and Prospects Customers and Prospects Agents Agents Direct Sales Direct Sales Distributors Integrators Distributors Integrators Force Force Retailers Retailers Direct Alliances Alliances Advertising Advertising Tele­ Tele­ Promotion Promotion marketing marketing Direct Mail Direct Mail Internet Internet Indirect Sales Force Options Non­Sales Force Options Company Company Figure 2­8  Comparing Various Go­to­Market Alternatives Low Cost per Exposure Advertising Direct Mail Internet Efficiency Telemarketing Sales Force Effectiveness High Sales per Exposure Figure 2­9  Product Development Management  Subprocesses Identify customer needs for better solutions Discovering and designing new product solutions Developing new solution prototypes Managing internal departmental priorities and involvement Designing activities to speed­up development process Launching new and redesigned offerings Figure 2­10  Supply Chain Management Subprocesses Selecting and managing supplier relationships Managing inbound logistics Managing internal logistics Managing outbound logistics Designing product assembly and batch manufacturing Managing process technology Order, pricing, and terms management Managing channel partners Managing product installation and maintenance Figure 2­11  Customer Relationship Management  Subprocesses Identifying high value prospects Learning about product usage and application Developing and executing advertising and promotion programs Developing and executing sales programs Developing and executing customer service programs Acquiring and leveraging customer contact information systems Managing customer contact teams Enhancing trust and customer loyalty Cross­selling and upselling of offerings Figure 2­12 Sales Force Program Marketing Objectives, Strategy, and Marketing Objectives, Strategy, and Strategy Implementation Program Strategy Implementation Program Estimates of sales Estimates of sales potential and  potential and  sales forecast sales forecast Account Relationship Strategy Account Relationship Strategy Desired Selling Actions Desired Selling Actions and Behaviors and Behaviors Estimates of sales force Estimates of sales force size and budget size and budget Organizational Structure Organizational Structure Competency Development Program Competency Development Program Leadership System Leadership System Feedback ise ip r rp s h e t n En atio l Re Investment by Supplier al n o cti ship a s on n a i Tr elat R ve i t lta ship u ns tion o C ela R Investment by Customer Figure 2­13: Alternative Types of Account Relationships Good 27% Very  Good 10% Fair 10% Poor 53% Figure 2­14: Partnering Effectiveness Index ... Learning about product usage? ?and? ?application Developing? ?and? ?executing advertising? ?and? ?promotion programs Developing? ?and? ?executing? ?sales? ?programs Developing? ?and? ?executing customer service programs Acquiring? ?and? ?leveraging customer contact information systems... Enhancing trust? ?and? ?customer loyalty Cross­selling? ?and? ?upselling of offerings Figure 2­12 Sales? ?Force? ?Program Marketing Objectives,? ?Strategy, ? ?and Marketing Objectives,? ?Strategy, ? ?and Strategy? ?Implementation? ?Program. .. Strategy? ?Implementation? ?Program Strategy? ?Implementation? ?Program Estimates of? ?sales Estimates of? ?sales potential? ?and? ? potential? ?and? ? sales? ?forecast sales? ?forecast Account Relationship? ?Strategy Account Relationship Strategy