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.

THE BIG PICTURE

Chapter 2:

Strategy and Sales Program  Planning

Business Strategy

Business Strategy Marketing Marketing Strategy Strategy

LEVEL 1

Top

Management

Decisions

Figure 2­1  The Sales Force Decision Sequence

Struct ure Compe

hip

LEVEL 3

Sales Force

Program

Decisions

Sales  Pro

cess Activ ities Account Relationship

Strategy

Go­to­Market Strategy

Supply Chain  Management (SCM)

Customer Relationship Management (CRM)

LEVEL 2

Strategy

Implementation

 (PDM)

Distinct competencies

   Marketing

   Financial

   Technology

   Information

Distinct competencies

   Marketing

   Financial

   Technology

   Information

Environmental constraints    Legal & regulatory

   Demographics    Economic Conditions    Technology

   Competitive conditions    Sociocultural factors

Environmental constraints    Legal & regulatory

   Demographics    Economic Conditions    Technology

   Competitive conditions    Sociocultural factors

Strategic Management

Planning

Strategic Management

Planning

Resources    Financial    R&D    Personnel    Brand Equity    Production

Resources    Financial    R&D    Personnel    Brand Equity    Production

Firm’s history management culture Firm’s history

management culture

Corporate goals Increase shareholder wealth by 10%

Corporate goals Increase shareholder wealth by 10%

Business unit objectives 12% revenue growth Grow pre­tax profits by 18%

Business unit objectives 12% revenue growth Grow pre­tax profits by 18%

Marketing objectives Increase product A’s market share by 2 points Grow contributions after sales & marketing by 20%

Marketing objectives Increase product A’s market share by 2 points Grow contributions after sales & marketing by 20%

Sales department objectives Achieve sales revenue of $210 million Grow contributions after sales expenses by 25%

Sales department objectives Achieve sales revenue of $210 million Grow contributions after sales expenses by 25%

Sales district objective Achieve sales revenue of $10.5 million in product A Obtain $7 million contributions after direct selling

Sales district objective Achieve sales revenue of $10.5 million in product A Obtain $7 million contributions after direct selling

Salesperson objective Achieve sales revenues of $1.2 million in product A Obtain $0.8 million in gross margin dollars

Salesperson objective Achieve sales revenues of $1.2 million in product A Obtain $0.8 million in gross margin dollars

Major account objective Achieve sales revenues of $95,000 in product A Obtain an average gross margin of 80%

Major account objective Achieve sales revenues of $95,000 in product A Obtain an average gross margin of 80%

Low Cost Strategy: 

Vigorous pursuit of cost reductions from 

experience and tight cost control. 

High Profit Sales Programs: 

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 

Differentiation strategy: 

Creating an offering perceived as being 

unique leading to high brand loyalty and 

low price sensitivity. 

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. 

Niche Strategy: 

Servicing a target market very well, 

focusing all decisions with the target 

market needs in mind, dominating sales 

with the segment. 

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 2­4:  Business Strategies and High Profit Sales Force Programs 

1 What is the best way to segment the market?

2 What are the essential activities required by 

each segment?

3 What group of go­to­market participants 

should perform the essential activities?

4 Which face­to­face selling participants should 

be used?

Steps in Developing a Go-to-Market Strategy

Figure 2­5:

Interest Creation

Purchase

Pre­Purchase Post­Purchase

Force

Direct Sales

Force

Agents Distributors Retailers

Agents Distributors Retailers Integrators Alliances

Advertising Promotion Direct Mail

Advertising Promotion Direct Mail

Tele­

marketing

Tele­

marketing Internet

Non­Sales Force Options Sales Force Options

Company Customers and Prospects

Figure 2­8   Comparing Various Go­to­Market Alternatives

Advertising Direct Mail

Internet Telemarketing

Sales Force

Effectiveness

Efficiency

High Sales per Exposure Low Cost

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 Strategy Implementation Program

Marketing Objectives, Strategy, and Strategy Implementation Program

Account Relationship Strategy

Desired Selling Actions and Behaviors

Desired Selling Actions and Behaviors

Organizational Structure

Competency Development Program

Leadership System

Estimates of sales potential and  sales forecast

Estimates of sales potential and  sales forecast

Estimates of sales force size and budget

Estimates of sales force size and budget

Feedback

by

Supplier

Investment by Customer

Tra nsa cti on al

Re lat ion shi p

e

p

En ter

pri se

Re lat ion shi p

Figure 2­13: Alternative Types of Account Relationships

Good 27%

Fair 10%

Poor 53%

Very  Good 10%

Figure 2­14: Partnering Effectiveness Index