A study on sales force management the case of toyota giai phong from 2002 to 2006

27 CHAPTER 2: ANALYSIS OF SALES FORCE MANAGEMENT AT TOYOTA GIAI PHONG .... LIST OF FIGURES Figure 1.1 Functional Sales Organization……….…….9 Figure 1.2 Geographical Sales Organization……….

vietnam national university, HANOI

hanoi school of business

Luu Thi Diep Anh

A STUDY ON SALES FORCE MANAGEMENT THE CASE OF TOYOTA GIAI PHONG

FROM 2002 TO 2006

Master of business administration thesis

Hanoi - 2007

vietnam national university, HANOI

hanoi school of business

Luu Thi Diep Anh

A STUDY ON SALES FORCE MANAGEMENT THE CASE OF TOYOTA GIAI PHONG

TABLE OF CONTENT

ACKNOWLEDGEMENTS i

TABLE OF CONTENT ii

LIST OF FIGURES v

LIST OF TABLES vi

LIST OF CHATS vii

INTRODUCTION 1

CHAPTER 1: SALES FORCE MANAGEMENT 5

1.1 DEFINITION AND THE ROLE OF SALES FORCE MANAGEMENT 5

1.2 FORMULATION OF A STRATEGIC PROGRAM 6

1.2.1 Sets goals and objectives 6

1.2.2 Demand estimation 6

1.2.3 Determines sales force size and structure 8

1.2.4 Sales territories 11

1.2.5 Quotas setting 13

1.3 IMPLEMENTATION OF THE SALES PROGRAM 14

1.3.1 Sales force recruitment and selection 14

1.3.2 Sales training 15

1.3.3 Sales Motivating 18

1.3.4 Designing compensation and incentive programs 19

1.4 MEASURING SALES FORCE 22

1.4.1 Measuring Sales Force Productivity Drivers 23

1.4.2 Measuring People and Culture 24

1.4.3 Measuring Activity 25

1.4.4 Measuring Customer Results 26

1.4.5 Measuring Company Results 27

CHAPTER 2: ANALYSIS OF SALES FORCE MANAGEMENT AT TOYOTA GIAI PHONG 28

2.1 INTRODUCTION OF TOYOTA GIAI PHONG 28

2.1.1 TGP history and development 28

2.1.2 Toyota Giai Phong’s organization structure 29

2.1.3 Toyota Giai Phong’s financial competency and facilities 32

2.1.4 TGP’s business performance from 2002 to 2006 34

2.2 THE SALES FORCE MANAGEMENT AT TGP 35

2.2.1 TGP’s sales model 35

2.2.2 Implementation of sales force management at TGP 37

2.3 MEASURING SALES FORCE PRODUCTIVTIES 43

2.3.1 Sales results 44

2.3.2 Customer results 46

2.3.4 Company results 52

CHAPTER 3: SOLUTIONS FOR IMPROVEMENT OF SALES FORCE MANAGEMENT AT TOYOTA GIAI PHONG 55

3.1 THE VIETNAM AUTOMOTIVE TREND 55

3.1.1 The Vietnam’s automotive market trend 55

3.1.2 The Vietnam automotive consumer’s trend 56

3.2 RECOMMENDED A NEW MODEL FOR TGP 56

3.2.1 Demand estimation 56

3.2.2 Sales force structure 57

3.3 IMPROVING QUALITY OF RECRUITMENT AND TRAINING 57

3.4 DEVELOPING CUSTOMER SATISFACTION PROGRAM 57

3.5 APPLY CRM 59

3.5.1 The core of CRM: 59

3.5.2 Benefits of CRM 60

CONCLUSION 62

REFERENCES 63

APPENDICES 64

LIST OF FIGURES

Figure 1.1 Functional Sales Organization……….…….9

Figure 1.2 Geographical Sales Organization……… …….10

Figure 1.3 Sales Organization with Product-Specialized Sales Force…… 10

Figure 1.4 Sales Organization Specialized by Type of Customers….… 11

Figure 2.1 Organization Structure of Toyota Giai Phong……… ….31

Figure 2.2 Sales force structure at Toyota Giai Phong ……….36

Figure 3.1 TGP’s sales organization specialize by type of customers … 57

LIST OF TABLES

Table 2.1 Human Resource of TGP……… ………… 33

Table 2.2 TGP’s performance for 5 years……….………34

Table 2.3 TGP’s commission table……….………41

Table 2.4 TGP’s Sales record in 2006………42

Table 2.5 Average sales volumes per salesperson………44

Table 2.6 TGP Customer satisfaction results from 2002 to 2006…… …46

Table 2.7 TGP’s types of customers………… ……….…48

Table 2.8 TGP’s sources of customers……… ………51

Table 2.9 TGP’s revenues vs profit from 2002 to 2006……… ….52

LIST OF CHATS

Chat 2.1 TGP’s business performance from 2002 to 2005……….…….34

Chat 2.2 TGP’s sales volumes in 2006……….……42

Chat 2 3 Sales volumes per salesperson………45

Chat 2.4 TGP’s Customers Satisfaction results from 2002 to 2006……46

Chat 2.5 TGP’s type of customers………48

Chat 2.6 TGP’s source of customers ………51

Chat 2.7 TGP’s revenues vs profit from 2002 to 2006……….…52

Chat 2.8 TGP’s market share……… ………….54

INTRODUCTION

1 THE PROBLEMS:

Sales force is a powerful asset of selling organizations It is a crucial factor contributes to the success and stable development of the firm A good sales force management can help the company to increase productivities as well as its competitive advantages In Vietnam auto market, the tough competition between well-known brand such as Toyota (Japan), Ford (America), Mitsubishi (Japan), Mazda (Japan), Isuzu (Japan), Suzuki (Japan), Daihatsu (Japan), Honda (Japan), Mercedes (Germany), BMW (Germany), Kia (Korea), GM-Daewoo (Korea), besides, there are local manufacturers: Truong Hai, Xuan Kien auto and Chinese low-cost imported cars make the auto dealers face many difficulties Toyota Giai Phong, 1 of 5 dealers in the North and 1 of 15 dealers of Toyota in Viet Nam, has three main functions: Toyota car sales – introduction, warranty, maintenance, repair service supply and genuine part supply It is tougher for Toyota Giai Phong because it compete not only with other brands dealers, but also with 14 other Toyota dealers in Viet Nam

After 8 years operation, Toyota Giai Phong has significant achievements but

it usually in the 3rd rank of Toyota Vietnam’s dealers Customer satisfaction is not as high as expected, sometime it is lower than average scores

The thesis “A study on sales force management – the case of Toyota Giai

Phong from 2002 to 2006” is aimed to study and propose solutions to

improve sales force management at Toyota Giai phong and can be applied for other dealers of Toyota Vietnam

2 OBJECTIVES AND AIMS:

Literature review about the sales force management like: designing sales force strategy and structure, recruiting and selecting, training, evaluating, compensating, and measuring sales force productivity

Base on Toyota Giai Phong’s sales force performance analysis, the thesis propose solutions for improvement of sales force management at Toyota Giai Phong

3 RESEARCH QUESTION:

The thesis uses some questions as follows to make clear the situation of Toyota Giai Phong and propose solution:

- What Toyota Giai Phong has been done so far?

- What Toyota Giai Phong can do to develop sales force management?

- What conditions need to make Toyota Giai Phong improve Sales force management?

4 SCOPE OF WORK:

The thesis studies on sales force management process as well as factors influence and measurements sales force productivity at Toyota Giai Phong from 2002 to 2006

5 DATA SOURCES:

The thesis bases on textbook of sales force management; human resource management, and some websites related to this topic also use to collect

information for theory part To analyze sales force performance at Toyota Giai Phong, this thesis uses documents of Toyota Giai Phong and Toyota Viet Nam

Propose solutions to build a perfect sales team for Toyota Giai Phong, it can

be applied for other Toyota dealers in Vietnam

10 OUTLINE:

Excluding introduction, conclusion and reference part, there are 3 parts in this thesis:

Chapter 1: Theory on sales forces management

Chapter 2: Analysis of sales forces management at Toyota Giai Phong Chapter 3: Solutions to improve sales force management at Toyota Giai

Phong

CHAPTER 1: SALES FORCE MANAGEMENT

MANAGEMENT

“A sales force is a group of salespeople or sales representatives responsible for the sales of either a single product or the entire range of an organization's products” (http://www.marketingpower.com/dictionary) A sales force normally reports to a sales manager A strong and efficient sales force is a vital asset to an organization It helps in the smooth realization of sales targets and ensures perennial sales productivity

Sales force management managing the sales force itself involves a number of key areas including, performance measurement, selection and training of salespeople, and motivational methods Sales-force management involves three different tasks Firstly, it is the methods for selling and managing a sales territory There are no prescriptive methods for doing this and, if anything, an adaptive approach to selling is probably best Secondly, it is the supervision

by management which should include valid performance measurement and suitable motivational methods The third task in concerned with the setting

up of a sales force in terms of its organization Key changes in the future are likely to be concerned with technological advancements and information handling The organization and structure of the sales force depends on several factors Different business scenarios require different types of sales force organization It may be possible to increase sales productivity by attempting new methods of sales allocation The new models of sales allocation are: Segment-based sales force, Functional sales force, Consultative sales force, Enterprise sales force, Transactional sales force Hybrid/Queuing sales force

The activity of sales in an organization is carried out by the sales force A highly motivated sales force is instrumental in increasing the sales productivity of the organization This increases the significance of sales force management With sales force management, a sales team will produce better ROI analyses for its customers, and improved sales proposals that are customer-focused

1.2 FORMULATION OF A STRATEGIC PROGRAM

1.2.1 Sets goals and objectives

To establish sales force goals and objectives, a company must determine the current status of the selling organization Goal setting methods are rooted in approaches for identifying market potential and other key drivers that impact performance Goals are based upon three key factors: marketing’s view of customer potential, the sales organization’s view of what is possible, and management’s insights and expectations SFM create a top-down, bottom-up analytical approach and develop goals that link to the company’s expectations

as well as gain the buy-in of all key stakeholders A typical goal setting will consist of an in-depth analysis of customer base, followed by a rigorous analytical development of potential estimation

1.2.2 Demand estimation

1.2.2.1 Important of sales forecast

In sales management, sales forecast is very important because inaccurate demand estimation can be costly The firms not only need to identify market opportunities but they also need to produce accurate estimates of demand for products the result from this activity

Market opportunity analysis involves:

 Estimation of market potential or the expected sales of a commodity by the entire industry serving the market during a stated period

 Estimation of sales potential or the share likely to be realized by the company

 Preparation of the sales forecast or the estimate of sales for a specified future period under an assumed marketing plan

1.2.2.2 Methods for sales forecasting

 Users’ expectations: this method is also known as the buyers’ intentions method because it relies on the answers of customers about their expected consumption or purchases of the products

 Sales force composite: this method requires every salespeople to estimates their expected sales These estimations are discussed, revised, and then pooled to other levels of the sales organization hierarchy

 Jury of executive opinion: this method is also called expert opinion method It pools the top executives of the company to assess the sales possibilities for next period The forecast may be done by average the individual judgment or by group discussion Besides, Delphi technique is also used, in this procedures each one in the group submits a forecast to the group coordinator The estimation summary is prepared by coordinators and distributed

to the ones who submit forecasts Then their estimates are revised

by them if necessary The process continues until a reasonable consensus is reached

 The market test: it is a controlled experiment where product is placed in several representatives cities to see how it perform and then the result are projected to the area in which the firm operates

 Time series analysis: the analysis of historical data is used to develop sales forecast

 Statistical demand analysis: relationship between sales and the important factors affecting sales is determined to forecast the future

Depend on the business field of the firm, Sales manager will choose the most suitable one to apply

1.2.3 Determines sales force size and structure

1.2.3.1 Purpose of sales force organization

Organizing the sales force makes the company to achieve the sales objectives

in a more effective way It helps to realize sales targets smoothly and ensures sales productivity for long time A sales force should be built in specialized groups and make the sales increasing stably and continuously There are many factors influence to the sales force’s organization and structure Different business scenarios require different types of sales force organization

1.2.3.2 How to design a sales force organization

 Principles for designing sales force organization

 Organizational structure should reflect a marketing orientation

 Organization should be built around activities, not around people

 Responsibility and authority should be related properly

 Span of executive control should be reasonable

 Organization should be stable but not flexible

 Activities should be balanced and coordinated

 Horizontal structure of the sales force

There are four common types of horizontal organization, structured base on selling function, geography, type of product and type of customer

Figure 1.1: Functional Sales Organization

Chief Marketing Executive

Advertising

Manager

Sales Promotion Manager Credit Manager

General Sales Manager

Marketing Research Manager

Salespeople

(Source: The McGraw-Hill Companies, Inc.2003)

Figure 1.2: Geographical Sales Organization

Chief Marketing Executive

Advertising

Manager

Sales Analyst

Sales Promotion Manager

General Sales Manager

Marketing Research Manager

Western Regional Sales Manager

Salespeople each with own

Eastern Regional Sales Manager

4 District Sales Managers

Salespeople each with own

4 District Sales Managers

(Source: The McGraw-Hill Companies, Inc.2003)

Figure 1.3: Sales Organization with Product-Specialized Sales Force

Sales Manager Product A

Sales Manager Product B

Sales Manager Product C

Salespeople Product C

Salespeople Product B

Salespeople Product A

Chief Marketing Executive

Advertising

Manager

Customer Relation Manager

Sales Promotion Manager

General Sales Manager

Marketing Research Manager

(Source: The McGraw-Hill Companies, Inc.2003)

Figure 1.4: Sales Organization Specialized by Type of Customer

Sales Manager Transportation

Sales Manager Steel Industry

Sales Manager Petroleum Industry

Salespeople Salespeople

Sales Promotion Manager

General Sales Manager

Marketing Research Manager

(Source: The McGraw-Hill Companies, Inc.2003)

1.2.4 Sales territories

1.2.4.1 The need for sales territories

A sales territory is a group of potential customers assigned to salespersons to contact and sales products The customers and geographic boundaries are the key to design sales territory but the key is distinguishing component is customers Good sales territories are made up of customers who have money and willing to spend it Good sales territory design can positively influence individual’s interest and morale, it also can improve market coverage and evaluation and control selling field of the firms

1.2.4.2 Sales force size

Sales force is a productive asset of the firm what brings most profit but it’s also costly Increasing salespeople will increase sales volume and cost

relatively It is necessary to decide sales force size before design territories for salespeople There are three popular methods for determining the size of sales force:

 Breakdown method: this method relies on estimation of sales volume per one salesperson and sales forecast to determine sales force size

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 Workload method: This method rests on the assumption that all

sales personnel should responsible for an equal work amount Management estimates total work required to serve the market, calculates the number of customers, total time to contact them and the time available for one salesperson Base on this forecast, manager determine total number of sales force

 Incremental method: This is the most difficult method to

implement because this method base on basic premise underlying the incremental method It means that sales representatives should be added so long as the incremental profit produced by their addition exceeds the incremental cost

1.2.4.3 Sales territories design

One the number of territories is determined, the sales manager can design the individual territories The general process might be expected to follows:

 Select the basic control unit,

 Estimate market potential in each control unit

 Combine control units into tentative territory

 Perform a workload analysis for each territory

 Adjust tentative territories to allow for sales potential and coverage difficulty differences

 Assign salespeople to territories

1.2.5 Quotas setting

1.2.5.1 Purpose of quotas

A sales quota is the sales goal assigned to a marketing unit in a specified period Sales quotas may be high or low depend on customer, product and market situation The quota plan is a full set of quota assignments

Sales quotas are used to motivate salespeople, evaluate their performance, and control their efforts For a quota plan to produce its potential benefits, the quotas must be attainable with normal effort, easy to understand, and complete

1.2.5.2 Quotas-setting process

 Select types of quotas: This choice entails determining whether

the firm will use quotas that emphasize:

 Sales or some aspect of sales volume

 The activities in which salespeople are supposed to engage

 Financial criteria such as gross margin or contribution to overhead

 Determine relative importance of each type: Most firms seek

some mechanism for combining the individual quotas in to a single summary measure that serves as the standard for each representative’s performance Often a linear combination or weighted average is used in which the weight reflect the importance of each component to management

 Determine the level of each type of quota: in this step the sales

manager need to determine the level at which each type of quota

is to be set In establishing level, sales manager must balance a number of factors, including the potential available in the territory, the impact of the quota level on the salesperson’s motivation, the long term objectives of the company, and the impact on short-term profitability

1.3 IMPLEMENTATION OF THE SALES PROGRAM

1.3.1 Sales force recruitment and selection

Recruitment is the most important function sales manager performs No matter how good you are at training, motivating, evaluating, and planning, all that applied to mediocre salespeople produces mediocre results Cast the play well and it becomes easier to direct

1.3.1.1 Establish policy concerning responsibility for recruitment

and selection

The first decision is who in the company will have the responsibility for hiring the salespeople Two factors influence this issue is: (1) the size of the sales force, and (2) the kind of selling involved In small firm, sales manager

in charged of recruitment and selection In larger one, like multi level firm, the authority is delegated to lower levels

1.3.1.2 Analyze the job and determine selection criteria

There are three steps in recruitment and selection procedures: (1) a job analysis and description, (2) the recruitment of a pool of applicants, and (3) the selection of the best applicants form the available pool

The job analysis and description phase includes a detailed examination of the job to determine what activities, tasks, responsibilities and environmental influences are involved Sales manager or job analysis specialist can conducted this analysis It is important for who prepare a job description that detail in the findings of the job analysis Job description is used to develop a statement of job qualifications, which list and describes the personal traits and abilities a person should have to perform the tasks and responsibilities involved

1.3.1.3 Find and attract a pool of applicants

There are some sources of recruitment both internal and external

 People within the company

 People in other firms

 Educational institutions

 Advertisements

 Internet recruiting

 Employee referrals

 Employment agencies

Each source has its own advantages and disadvantages The matter is that sales manager needs determine which source or combination of sources is likely to produce the largest pool of good, qualified recruit

1.3.1.4 Develop and apply selection procedures to evaluate

applicants

The final of recruitment is to evaluate each applicant through personal history information, interviews, reference checks, and formal test The purpose is to find the best applicant who meets the qualifications and requirements of the firms

1.3.2 Sales training

A formal or informal program designed to educate the sales force and convey management expectations of job responsibilities Sales training provides managers with the opportunity to communicate high performance expectations through training and to equip the sales force with the skills needed to reach high performance levels A well-designed training program moves beyond passive learning techniques and shows the sales force how to sell

1.3.2.1 Determine objectives

Salespeople are not born, but are made Every organization should have a sound sales training and development program to train salespeople Training sales force well not only increases their productivity and capacity but also improves sales force confidence and enthusiasm, reduce turnover, improve customer relations, and product better management of time and territory

1.3.2.2 Develop and implement program

 Training program is designed to train both new and experienced salespeople The topics should contain in training program are: product knowledge, competitive knowledge and advantage, customer knowledge and profile, selling skill

 Training courses on theory are normally held at the office/meeting room but some courses needed application, hand-

on and experience training, so salespeople need to work at or tour their factory/other depts./customer’s location to understand more about what they have learnt

 Media use in sales training: Classroom with Instructor (77%), Workbook/manuals (54%), Role plays (44%), CD-ROM (39%), Audiocassettes (34%), Internet (32%) [Rosann Spiro, 2000, p83]

1.3.2.3 Evaluate and review program

At the end of each training session, the salespeople will be asked by interview

or survey if they are satisfied with the course (perception of training, course evaluation and instructor evaluation) Base on these evaluations, the corrective action will be taken for future improvement Every six months, all salespeople will be tested on product, competitor, customer knowledge, and selling skill The score will be compared with previous test and benchmarked against peers This presents a reality check for both the salesperson and sales manager and identifies areas where each salesperson needs more training

1.3.3 Sales Motivating

Sales motivation is a factor make sales success because the salesperson’s efforts to their job activities related closely to job motivation The impacts on motivation are: salesperson’s personal characteristics, environmental conditions and organizational variables

1.3.3.1 The impact of a salesperson’s personal characteristics on

motivation

Each salesperson with personal characteristic has different perceptions of the links between effort and performance (expectancies), and between performance and rewards (instrumentalities) They are also likely to have different valences for the rewards they might obtain through improved job performance The personal characteristics the affect motivation include (1) individual’s satisfaction with current rewards, (2) demographic variables, (3) job experience, and (4) psychological variables-particularly the salesperson’s personality traits and attributions about why performance has been good or bad

1.3.3.2 The impact of environmental conditions on motivation

Environmental factors such as variations in territory potential and strength of competition can constrain a salesperson’s ability to achieve high levels of performance Such environmental constraints can cause substantial variations

in performance across salespeople

1.3.3.3 The impact of organizational variables on motivation

The company policies like incentive and compensation and characteristics can directly facilitate or hinder a salesperson’s effectiveness Organizational

variable like leadership, span of control and supervisory variables also influence salespeople’s performance indirectly by affecting their valences for company rewards and the size and accuracy of their expectancy and instrumentality estimates

1.3.4 Designing compensation and incentive programs

Compensating sales force presents a particular challenge because packages must be extremely competitive and should provide adequate incentives to motivate employees to do their best and allow company to achieve maximum profitability The framework to use when designing compensation and incentive as follows:

1.3.4.1 Assessing the firm’s situation and sales objectives

Purpose of sales compensation program is to influence the sales force to reach the target manager set The requirements they made are largely dictated by the firm’s marketing and sales objectives and account management policies

1.3.4.2 Determining which aspects of job performance to reward

It is necessary to design a sales compensation and incentive package to determine salespeople’s current valences for various rewards When the firm’s objectives and time allocation of salespeople is not matched, the compensation and incentive program can be redesigned to reward desired activities or performance outcomes more strongly, the motivating the sales reps to redirect their effort Because people’s need for a particular reward vary, depending on their personalities, demographic, characteristics, so diversification compensation program is needed

1.3.4.3 Deciding on the most appropriate mix of compensation

The decision about how much total compensation (basic salary plus commissions or bonuses) a salesperson may earn is crucial in designing affective motivation program Overpaying and underpaying are not good for compensation program Overpaying can cause resentment and low morale among the firm’s other employees and executive when the salespeople can earn more money than even top management Underpaying is likely to make the firm have high turnover, with higher cost for recruiting and training replacement and lost sales

1.3.4.4 Financial incentives: choosing the most effective form of

finance

In order to determine the most effective form of financial compensation, the firm need to decide whether it should use (1) straight salary, (2) straight commission, or (3) a combination of base salary and incentive pay such as commissions, bonuses, or both Nowadays, most organizations use the combination (basic salary + incentive+ commission) The base salary provides the salesperson with a stable income while allowing the company to reward its salespeople for performing tasks not directly related to short-term sales The incentive portion of combination plans provides direct rewards to motivate salespeople to extend effort to improve their sales volume or profitability To be effective, the incentive pay portion of the combination plan has to be large enough to generate the necessary interest among salespeople

1.3.4.5 Sales contest

Sales contest is a part of the incentive portion of compensation system But it

is short-term program to motivate salespeople to get sales target To be successful, a sales contest needs to have (1) clearly defined, specific objectives, (2) an exciting theme, (3) reasonable probability of rewards for all salespeople, (4) attractive rewards, and (5) the necessary promotion and follow through

1.3.4.6 Nonfinancial rewards

Nonfinancial incentive plays an important role in a firm’s compensation system Advancement and promotion opportunity are one of effective motivations Because all salespeople cannot possibly move into sales management positions, some companies have dual career paths to maintain the motivating potential of promotion and advancement One leads to positions in the sales management hierarchy, and other leads to greater responsibility in selling itself, such as a better territory or key account sales

To recognize if programs are effective, the salesperson’s peers and superiors need to realize outstanding performance of the representatives This can be done through a formal recognition program at a sales meeting, publicity in the local press, announcement in the company’s internal newsletter, or in other desirable ways

1.3.4.7 Reimbursement of selling expenses

Since different reimbursement plans have an impact on the effective financial compensation received by, and the motivation level of, firm salespeople, however, some of the relative advantages and limitations of alternative plans and policies as follows

 Direct reimbursement plans: the most popular type of expense

reimbursement is direct and unlimited reimbursement of all

“allowable and reasonable” expenses In order to get reimbursement, salespeople have to submit all receipts or retail records justify expense claims and the company agrees to pay 75% of all the salesperson’s entertainment, travel and telephone… expenses Salespeople and company share the expenses -> it make salespeople have more responsible and save expenses

 Limited reimbursement plans: Some firms limit the total amount

of expense reimbursement, either by setting the maximum limits for each expense item (e.g., $40 for lodging and $50 for food) Both arrangements must vary dollar amounts to accommodate different expenses in different territories The flat monthly allowance allows you to accurately forecast this expense item

 No reimbursement plans: all necessary expenses of salespeople

are included in the financial compensation This kind of plan is most commonly associated with “straight commission” compensation plan involving high percentage commission The rationale is that salespeople will be motivated to spend both the effort and money necessary to increase sales volume as long as the resulting financial rewards are big enough to be worthwhile

1.4 MEASURING SALES FORCE

To evaluate sales force productivity, it is necessary to base on five dimensions: (1) productivity drivers, (2) people and culture, (3) sales

activities, (4) customer results, (5) company results Each component of a selling organization is used to measure some scopes Sales force investment, sales force activity, customer results, and company results are easy to measure Cost, sales, and profit data are kept in the accounting system Activity data can be collected from customer surveys, or sales managers, or through self-reporting Many firms search for customer feedback to supervise their operations and to get information that they can use for improvement

The following sections describe how each component is measured:

1.4.1 Measuring Sales Force Productivity Drivers

 To measure sales force productivity drivers, sales management decisions or processes are needed to be examined Among many drivers, competency and impact are the two useful measures of these productivity drivers Each decision or process is assessed in terms of how good the selling organization is at that decision or process Moreover, each decision or process is also appraised in terms of its impact on the selling organization’s ability to succeed

 Competency and impact can be evaluated by quantitative and qualitative measures Territory-level analysis is very useful measure among many quantitative ones to evaluate sales force productivity drivers Salespeople’s target needs to be improved if they do not allocate their time effectively The compensation plan needs to be revisited if high performers are underpaid and low performers are overpaid The sales territories need to be

rebalanced if some sales territories have significant workload and others do not have enough work to do

 Qualitative Measures of the Sales Force Productivity Drivers

 Qualitative data can be used to evaluate both the impact of productivity drivers and the organization’s current competency Qualitative data can be collected by interviewing with salespeople and managers in the field with salespeople or in the workshop sessions with experienced sales and marketing managers Managers hear the results of field interviews and are presented with quantitative data Then they are asked to assess the organization’s competency and the impact of their sales force productivity drivers

 Another Qualitative Benchmark: Result of a research on the impact on the ability of the sales force to succeed which run by the authors at the Kellogg Graduate School of Management shows that recruitment, training, and the first-line sales manager are crucial factors influence sales force succeed These are the

“people” drivers from Sales Force Productivity Framework [Andris A Zoltners, 2001, Page 47]

1.4.2 Measuring People and Culture

 Selling organization contains different people, and it causes the differences between sales forces Some have good performance but some have not The best way to evaluate salespeople is testing From the test, knowledge and skill levels of the sales

force are known Turnover is a good measure of motivation and compensation policy

 Sales managers also need to be evaluated Normally, companies base on sales results to assess sales management It is valuable to determine how managers contribute to salesperson growth, culture formation, and customer satisfaction A good measurement tool to evaluate sales managers is peer and subordinate reviews

 The culture is the core of the organization It is the unwritten rules that guide the behavior of salespeople and sales managers

in the firm when they face familiar or new situations Culture is norms, values, and the way people treat to each other within the company to make their works more effectively Each selling organization has distinct culture Some are empowering; others are controlling Some are focused on short-term results; others are focused on long-term results In spite of these cultural differences, many selling organizations have been successful in this industry However, some cultures are more successful than others because of factors influence to its culture like marketplace and competitive environment

1.4.3 Measuring Activity

 In order to reach the sales target, salespeople need to do the right things It is up to their business field, there are various ways to influence customers and prospects They can make a phone call

or arrange an appointment to see customers or prospects They

make quotations, prepare contract, bid on business, write proposals and letters, take orders and service customers, demonstrate their products or leave selling aids; they may even work with customers to integrate their products into the customers’ products and processes They target accounts and call

on the appropriate individuals in a customer’s organization Sales force activity can be monitored to know if the sales force is doing the right things and right directions

 There are some ways to measure sales activity Some sales managers want to control all activities of salespeople They need

to report in detail what they do to their sales manager such as customer information, how to contact, stage of the process This method makes sales manager know exactly sales activities so they can adjust in time In contrast, some sales managers just focus on the sales results They think that the sales force should

be completely empowered However, valuable activity measures can be obtained even in the totally self-managed selling organization

1.4.4 Measuring Customer Results

Besides sales results, customer results are a good component to measure sales force performance “Through successful interaction with customers, the sales force creates customer solutions, customer satisfaction, and sustainable profitable relationships Customer retention rates, repeat rates, loss ratios, penetration, message memorability, and complaints have been used to evaluate customer relationships” [Andris A Zoltners, 2001, Page 60]

Conventional method to measure customer satisfaction is survey Customers’ thinking about product, price, and sales service is expressed in the survey So,

it is important to write a questionnaire that shows the impact of sales force on customer satisfaction

1.4.5 Measuring Company Results

In selling organizations, sales force is a significant contributor to the success

of the firms Top management base on sales and its profits to evaluate sales force performance Financial achievement of a selling organization is shown

in sales and profits These measures can be expressed in four ways: (1) stated

in absolute levels, (2 conveyed as a percentage of goal attainment, (3) expressed relative to the prior year’s performance, (4): compared to the competition

Sales force is a complex organization It is impossible to use single measurement to assess complexity one In order to evaluate sales force management effectively, it is necessary to combine five dimensions of sales force productivity framework: (1) productivity drivers, (2) people and culture, (3) sales activities, (4) customer results, (5) company results

CHAPTER 2: ANALYSIS OF SALES FORCE

MANAGEMENT AT TOYOTA GIAI PHONG

Being one of Toyota Vietnam’s dealers, Toyota Giai Phong (TGP) has face with many tough competitive with others dealers of Toyota Vietnam (TMV)

as well as others brands in autos markets

2.1 INTRODUCTION OF TOYOTA GIAI PHONG

2.1.1 TGP history and development

Toyota Giai Phong- a joint-venture company- is established on 22nd January,

1998 under Investment License No 14-GP-HN of Hanoi People Committee Toyota Giai Phong became Toyota Vietnam’s dealer on 1st

October, 1999

 Toyota Giai Phong’s Founders:

Vietnamese partner is Saigon General Service Company (SAVICO):

- Address 66-68 Nam KY Khoi Nghia Street, 1st district, Hochiminh city

- Business field: trading, manufacturing, exporting, importing, transporting, real-estate

Japanese partner is Sumitomo Corporation (SUMITOMO)

- Address: 2-2 Hototsubashi, 1-chome, Chiyoda-JV, Tokyo, Japan

- Business field: General trading including automobile and parts

 Investment scale:

- Investment capital: 3,000,000 USD

- Investment duration: 20 years

SAVICO contribute 51%

SUMITOMO contribute 49%

 Business field:

Toyota Giai Phong Company has been operating since April,

1999 as TASS with function is maintenance, warranty, reparation

of Toyota vehicle Since Oct, 1999, Toyota Giai Phong became official dealer of Toyota Vietnam with the main functions as follows:

- Selling Toyota vehicles in Vietnam

- Supplying after sales service, warranty and maintenance automobiles

- Supplying genuine parts

- Exporting local assembled cars

- Training and developing distribution network in Vietnam

2.1.2 Toyota Giai Phong’s organization structure

According to joint-venture charter and contract regulation:

- Board of management includes 4 members: 2 members are belong to Savico, 2 others belong to Sumitomo

- Board of directors includes 1 General Director and 1 Deputy General Director who assign by Board of management

- Under Board of Management and Board of Directors, there are 4 main departments at TGP:

Figure 2.1: Organization Structure of Toyota Giai Phong

PARTS SECTION TECHNICAL

MAINTERNANCE WORKSHOP

ADMIN & HR DEPARTMENT

SALES DEPARTMENT

CONSULTANCE SECTION

2.1.3 Toyota Giai Phong’s financial competency and facilities

2.1.3.1 Finance competency:

- Fixed capital: 1,295,360 USD including:

Showroom investment: 200,000 USD

Workshop Equipments: 210,000 USD

Land renting and compensations: 665,360 USD

Other fixed assets: 70,000 USD

- Working capital: 704,640 USD

- Banking loans competency: being a joint-venture of Savico and Sumitomo, all banking loans of Toyota Giai Phong are guaranteed by Sumitomo & Savico without mortgage

2.1.3.2 Facilities:

- Location: Workshop and showroom are located at 807 Giai Phong road, Ha Noi This is a strategic place though it is not located at the center

- Total area: 2000m2

- Workshop competency: The workshop is designed according to Toyota standard and it is equipped modern machines, equipments …to ensure that it can repair all kind of automobile