Sales Mid-Term

Leading versus managing

(1) Communicating with salespeople rather than controlling them, (2) becoming a cheerleader and coach instead of a supervisor or boss, and (3) empowering salespeople to make decisions rather than directing them.

Economic environment

(1) The amount of growth, the unemployment rate, and the level of inflation, (2) the existing distribution structure in an industry, and (3) the amount of competition in the industry.

Ch.1 A number of organizations that did not consider marketing part of their business activities in the past have found the need to begin to market their services. Nowhere is this more prevalent than in the nonprofit community. While not "selling" a product or service, public service organizations such as the Red Cross have developmental officers who market the organization in the community. How might you "sell" a public service organization in the community? What is different about this versus selling for a for-profit enterprise? What would be your goals and how would you accomplish them?

-"Selling" a public organization in the community can successfully use the same relationship selling approach as a for-profit institution. The primary difference about this type of organization versus a for-profit company is that the "product" being sold is a charitable or educational service being provided to the community, and the customers are both the donors to the charity and the recipients of the services, as opposed to traditional "purchasers." A public organization can build relationships with its donors, just as a for-profit enterprise would build relationships with its customers, in order to understand what their needs and desires are and how to communicate the service in such a way that the customers understand the value provided. As with for-profit selling, environmental factors, such as the economy, legal/political issues, and social values, can and must be taken into account. -Using the Red Cross as an example, its goals might include increasing blood donation, increasing or securing donations for emergency aid when a disaster strikes, and other similar types of drives. These goals would be accomplished, and the organization "sold," by finding out what motivates someone to give and then providing them with that opportunity. For example, an individual may want to give to a disaster relief fund in order to repay the Red Cross for taking care of his or her family. Another individual may be looking for tax relief. In both cases, a Red Cross development officer can structure a gift so that the individual's needs are met.

Ch. 2 Explain the differences among a new-task purchase, modified buy, and straight rebuy. How is each situation likely to alter the way a salesperson approaches a client?

-A new-task purchase is where a customer is buying a relatively complex and expensive product or service for the first time (e.g. a new piece of production equipment or a new computer system). In this case, the seller is an "out supplier," and the objective is to move the customer away from the automatic reordering procedures of a straight rebuy toward the extensive evaluation processes of a new-task purchase. -A modified rebuy is where a customer wants to modify the product specs, prices, or other terms it has been receiving from existing suppliers and will consider dealing with new suppliers to make these changes if necessary. In this case, the seller is an "out supplier," and the objective is to move the customer away from the automatic reordering procedures of a straight rebuy toward the extensive evaluation processes of a modified rebuy. -A straight rebuy is where a customer is reordering an item he or she has purchased many times (e.g., office suppliers, bulk chemicals). In this case, the seller is an "in supplier," and the salesperson will want to maintain or increase the repeat ordering by keeping the customer satisfied and continuing the relationship with the buyer who handles that seller (usually a newer buyer or assistant).

Sales management process:

-Consists of three interrelated sets of decisions or processes. Formulation of a sales plan: -Creation of a sales management team design and sales process that takes environmental and other factors into consideration. Implementation of the plan: -Involves the selection of appropriate sales personnel and the creation of policies and procedures that will direct sales efforts toward the desired organizational objectives. Evaluation and control: -Development of methods for monitoring and evaluating sales force performance.

Ch. 2 Creativity is important to sales success. What is creativity? Give a specific example of something or several things you have done that you think are especially creative. How might creativity be taught or trained to salespeople?

-Creativity is the ability to be original, expressive, imaginative, and innovative. Art is creative. Music is creative. Coming up with a business idea that has never been done before is creative. For example, Richard Branson at Virgin Atlantic Airlines is very creative in his sales promotions, such as traveling the world in a hot air balloon. -Creativity may be taught to salespeople by encouraging them to break out of their routines or to decorate their workspaces to reflect their own personality and creativity. A firm can provide salespeople with time each day to work on coming up with creative solutions to problems. Salespeople can also be encouraged to read and study the creativity of others, such as by reading biographies, success stories, articles, and examples. --Guest speakers can often share ideas and examples on how to be creative in the workplace. See the Innovation box "How to Create Your Own Creativity."

Slotting Allowances

-Fees retailers charge sales organizations for guaranteed shelf space. -They cover the cost of setting up a new item in their IT system, programming it into inventory, and ultimately distributing it in stores.

Key Themes in Chapter 1

-Innovation Fuels Success in Selling Today -Sales Effectiveness Is Enhanced through Technology -Leadership Is a Key Component in Sales Management Success -Sales Management Is a Global Endeavor -Ethics Underlies All Selling and Sales Management Activities

Ch. 3 Consider the three basic relationship types described in the chapter: market exchanges (transactional), functional relationships, and strategic partnerships. For each, provide am example of a different sales organization that you believe does a good job with that particular relationship type. What evidence do you have that each is successful?

-Market Exchange: Nordstrom: the transaction process was smooth and efficient. Salesperson helped me try on my shoes, gave other options in different colors, and gave me feedback on his favorites -Functional relationship: Louis Vuitton: I have a client advisor that always updates me on new arrivals and other products that might interest me. -Strategic relationships: Barnes & Nobles: Customers have twice the reason to shop now. A coffee with a break to read, while browsing all the latest bestsellers all in one stop.

Repeat purchases

-Occurs when a customer buys the same product under the same circumstances again and again. -It tends to be much more routine than new-task purchase or modified rebuy.

Ch. 3 Based on what you have learned about strategic partnerships, what two organizations (either supplier-customer or supplier-supplier) can you identify that are not currently in a partnership but you believe would benefit from one? List the benefits to both parties of forging such an alliance. List any potential problems you believe might emanate from the alliance. What can the firms do to reduce the chances for these potential problems?Based on what you have learned about strategic partnerships, what two organizations (either supplier-customer or supplier-supplier) can you identify that are not currently in a partnership but you believe would benefit from one? List the benefits to both parties of forging such an alliance. List any potential problems you believe might emanate from the alliance. What can the firms do to reduce the chances for these potential problems?

-Sherwin Williams & Pottery Barn Benefits: -Can create a line of paint together -put section on Pottery Barn's website to allow customers to pick their paint so it can go with their furniture pieces -convenient -one-stop shop -both known for high-quality products -Cons: -some people might want professional painters instead of doing it themselves -Solution: -have the option of having a professional painter come to the customers house or do it yourself at checkout.

Ch.1 What do you think the differences would be in the selling process for the following products and services? How would managing the sales process differ for each? -Selling Planter's Peanuts to your grocer. -Selling Planter's Peanuts to Southwest Airlines to be given to its customers. -Selling telecommunications equipment costing $1 to $2 million to the government. -Selling telecommunications equipment costing $1 to $2 million to General Electric -Selling five-year leases on prime retail space in Beverly Hills

-The two Planter's Peanuts situations are designed to get students to think about how a grocer buys Planter's, considering that they will turn around and sell to end-consumers. On the other hand, Southwest Airlines is purchasing the peanuts to be used as a part of their service system—sort of like an input to production for a manufacturer. -The two telecommunications examples are presented to get students to consider the differences in selling to the government, which uses a strict bidding process, as compared with selling to private companies. The final situation encourages students to consider the sale of services compared to tangible equipment.

Ch. 1 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?

-To some extent, the Internet has already replaced some of the traditional salesperson's role in the sense that companies are using the Internet for prospecting (finding new customers), researching, and for taking re-orders from current salespeople. -As discussed in the chapter, many customers, especially small and medium sized businesses, are perfectly content to establish relationships with sellers via websites and e-mail. However, there will also be situations that require face-to-face demonstrations and sales calls. Further, many customers will also want personal interaction and someone in charge of their account. In these situations, such as capital equipment sales, financial services, and a number of others, there will probably always be salespeople making calls at customers' locations.

Ch. 5 The chapter describes the process to follow to develop territories. After territories have been developed, changes may occur that indicate the territories need to be realigned. What changes can you identify that indicate the need for realignment? How would you go about the process of realigning territories? How would you implement the changes?

-increased costs of customer acquisition due to geographically distant regions in the current territories -customer mix based on demographic and psychographic features that needs a realignment in territories - inefficiencies of sales force higher workload in specific territories and lowered workload in others -extension of product lines with the introduction of new products or innovations Implementing them: -identifying all the needs and objectives to realign territories -communicating the territory alignment with the salesforce in the specific territories

Organizational Buying Decision Stages

1) Anticipation or recognition of a problem or need, (2) determination and description of the characteristics and the quantity of the needed item, (3) search for and qualification of potential suppliers, (4) acquisition and analysis of proposals or bids, (5) evaluation of proposals and selection of suppliers, (6) selection of an order routine, and (7) performance evaluation and feedback.

"Great Salespeople are Born, but Great Sales Forces are Made" What are the six processes that sales managers lead? Why is each important? Where do your strengths lie?

1. What are the six processes that sales managers lead? Strategy Organization Talent Execution Support Improvement & Adaptation 2. Why is each important? Strategy is important because it helps you narrow down your focus on an important aspect-making the sale. Also, it allows for you to address the needs of your customers. Organization is important because it helps the company run more smoothly and makes sure everything is planned out and well-coordinated. Talent is important because it drives the highest levels of success and brings out engaged and high-performing employees. Execution is important because it helps achieve performance improvement goals. Support is important because a good support structure helps lead to valued performance and new opportunities for the organization. Improvement & Adaptation is important because improvement means there are opportunities for growth and to develop on skills. Adaptation allows for new opportunities to come about and the chance to exercise creativity to benefit the organization through new ideas and inspiration. 3. Where do your strengths lie? I believe my strengths lie in the execution process because I am a very dedicated and persistent person. I like to stick to what I'm doing and have a long-term commitment to it. Organization is also a strength that I'd identify myself with because I am a strong planner and like to layout all the tasks/assignments I need to accomplish and complete them. 4. Overall, I think this article nailed down the processes that generates a great sales force. I agree that some people are born with the natural instincts of being ultimate sellers. But if being a great salesperson is completely built-in, then having a training department would be pointless. I believe that the best salespeople should always be open to new insights and looking for ways to strengthen and develop themselves.

Ch. 5 In the typical case, management by exception leads to a close examination of below- par situations. Only sales representatives who are not meeting objectives, products that are not selling according to expectations, and customers who are not buying products as predicted are carefully reviewed to determine corrective action. What arguments can be advanced for conducting a close examination of the opposite, above-par situations?

1st argument: taking analysis of the products, employees, and customers delivering best performance will help not only increase the positive impact across the organization but it will also help the organization to design strategies that can further motivate these groups of people to deliver the same performance in the future. 2nd argument: the best performing employees can be assigned a leadership and mentoring role to those employees who are under-performing.

marketing program

A combination of elements from the marketing mix to implement the strategy. It reflects a particular allocation of financial and human resources.

Ch. 4 LaMarche's Enterprice manufactures both technical and nontechnical products. Its sales forces are organized in the same manner. The technical sales force has 175 people, and the nontechnical group numbers 128. To what extent would such a division affect the following? a. recruiting b. sales training c. compensation d. supervision e. span of control

A division would have an effect as follows: • a.Recruiting for the technical sales group would be different. People with technical experience or technical degrees likely would be recruited. • b. Sales training for the technical group likely would involve more product knowledge and possibly product servicing. • c. Compensation may or may not be affected depending on differences in complexity of the sale, product price, and the time it takes to finalize a sale. Also, if the technical products are higher priced and involve a longer selling time, their compensation may involve more salary and less incentive. • e. The span of control for the non-technical group likely would be larger than for the technical group. The technical group would need more support and supervision. Service personnel may work directly with the technical sales representative, but not with the non-technical group.

Derived Demand

A firm's demand for goods and services—derived from its customer's demands.

selling center

A group of individuals from the organization (marketing customer service, sales, etc.) assembled to help the salesperson do his/her job more effectively.

Selling team

A group of representatives from various functional departments of the company assigned to a single customer.

buying power index

A percentage denoting regional sales potential.

Ch. 1 Salespeople are also called sales representatives. Define the term representatives. whom does the salesperson represent? why is it important to recognize the different groups that salesperson represent? how does this recognition of who is represented influence sales management?

A representative is someone who is empowered to act for someone else. This strict definition means that the salesperson does not just represent a product, but rather represents the people who are responsible for making the product, shipping it, billing the customer, and so forth. The salesperson makes promises to the customer that these other people must keep. Hence, the salesperson has an obligation to these other people in the company to promise only what they can deliver. Furthermore, the salesperson represents the customer, making the customer's wishes known to management. At times, the salesperson has to argue the customer's case in order to get the customer's needs met. Of course, salespeople also represent themselves and have an obligation to make sure that they are treated appropriately by customers and their own company. By recognizing these responsibilities, salespeople can make judgments about appropriate and inappropriate behavior. Sales managers can also recognize that salespeople have multiple obligations and recognizing the multiple dimensions of representation can help sales managers make appropriate demands on their salespeople. We will later learn that these characteristics of the sales role are called "boundary-spanning."

isolate and explode

A sales analysis technique where the most significant discrepancies between actual and standard are identified, or isolated, and then examined in detail, or exploded.

Expectancies

A salesperson's estimate of the probability that expending effort on a specific task will lead to improved performance on the same dimension.

Instrumentalities

A salesperson's estimates of the probability that improved performance on a given dimension will lead to increased attainment of particular rewards.

Valences for performance

A salesperson's perception of the desirability of attaining improved performance on some dimension or dimensions.

Valences for Rewards

A salesperson's perceptions of the desirability of receiving increased rewards as a result of improved performance.

Transactional selling

A series of transactions, each one involving separate organizations entering into an independent transaction involving the delivery of a product or service in return for compensation.

NAICS or North American Industrial Classification System

A system that has replaced the former system of Standard Industrial Classification (SIC) codes.

multi-level selling

A variation of team selling, where the sales team consists of personnel from various managerial levels who call on their counterparts in the buying organization.

one-to-one marketing

Ability to customize offerings for individual users.

Relationship selling

Act of working with customers to solve their problems, improve efficiencies, and, in general, add value to their customers' businesses.

Ch 1. Changes in the technological environment have the potential to significantly affect the activities of the sales force. Automation can offer the sales force a competitive advantage-if the sales force is motivated to use computers and other technological methods that are part of automation. What steps should management adopt to ensure that the sales force buys into the company automation system? Especially, what can the sales organization do to promote technology use by more senior salespeople (senior in age, that is)?

Advancing technology is inexorable. Salespeople who embrace new technologies and use them to enhance their efficiency and effectiveness will be well positioned to achieve the success they desire with their customers and from their own companies. Sales managers and their organizations must provide adequate training on technology usage, especially for more senior salespeople who did not "grow up" using the technologies that newer salespeople take for granted. Salespeople should be evaluated on how well they use the available technologies to their advantage and should be rewarded for doing a good job on this important aspect of their performance.

Sales management

All activities, processes, and decisions involved in managing the sales function in an organization.

Buying Center

All the people who participate in buying a particular product or service.

logistical alliances

Alliances between customers and suppliers resulting in the development of computerized information and ordering systems for customers to place orders directly via a dedicated telephone or satellite link to suppliers' computers.

Ch. 2 What aspects of sales jobs do you believe provide a strong foundation for moving up in an organization?

Among the possibilities are: • Wealth of knowledge about a firm's customers, competitors, and products; • Experience at building effective relationships—both inside and outside the company; • Strong team skills; • Leadership ability; • Goal orientation and results focus.

Efficient consumer response (ECR)

An automated system in which sales information from stores is sent directly to computers, which figure out automatically when to replenish each product and schedule deliveries direct to each store. This paperless exchange minimizes mistakes and billbacks, minimizes inventory, decreases out-of stocks, and improves cash flow.

Ch.4 Telemarketing has recruited in the development of inside sales forces. Some companies assign sales trainees to the inside or telephone sales force as part of the training program in preparation fo an outside sales position. Other companies view the two positions as separate. What functions would an inside (telephone) sales force perform? How would these functions differ from those performed by the external sales force? How would compensation plans differ? How might social media and online tools best be used to augment telemarketing/inside sales efforts?

An inside telephone sales force might engage activities such as the following: • Qualify leads from inquiries before turning them over to the sales force • Sell products to marginal accounts and accounts too small to justify personal coverage • Follow up on orders, deliveries, and complaints • Handle credit and collection activities Assigning the above activities to inside sales forces frees up the outside sales force to engage in more relationship building activities with clients, and of course to focus on clients where an investment of time by an outside salesperson is more likely to pay back. Compensations plans would likely differ between an inside and outside sales force with the same firm. The activities and job requirements are different enough that the evaluative criteria for performance may be quite different. In addition, some firms use the inside sales force as a training ground for promotion to outside sales. Chapter 11 gives more insights on compensation and incentive plans in general.

Matrix Organization

An organization of direct reports and supporting internal consultants who bring their collective expertise to bear for a client.

Target marketing

Applying principles of segmentation to create different strategies and marketing programs for different consumer groups.

Ch. 2 Purchasing Management Position Descriptions. In class discussion of purchasing career paths plus this chapter described the buying process and the roles of purchasing executives. If you do not feel sales roles motivate you, what about working in purchasing for a large industrial firm or hospital might be interesting? A good answer would refer specifically to the tasks of purchasing agents in a professional selling setting: Buying process.

As a purchasing manager you will be responsible for sourcing equipment, goods and services and managing vendors. The successful candidate will be able to perform strategic procurement activities across multiple categories of spend, search for better deals and find more profitable suppliers.

Organizational Citizenship Behavior (OCB)

As the role of the salesperson has changes from focusing on single transactions to building and maintaining a relationship with customers, the behaviors critical for success have changed and evolved. OCB behaviors focus on four basic types of behavior: (1) sportsmanship, (2) civic virtue, (3) conscientiousness, (4) altruism (please refer to Exhibit 6.2 on pg. 192 for examples of these behaviors).

team selling

Assigning a group of specialists inside the firm to an individual customer.

activity quotas

Attempt to recognize the investment nature of a salesperson's efforts in a letter to a prospect, the product demonstration, and the arrangement of a display that may not produce an immediate sale, but may influence a future sale.

Ch. 6 Maria Gomez-Simpson, a customer service rep with GRA-JUS Associates, spends considerable time traveling to various customer offices. As a result, she often arrives home late. Maria asked her manager if she could rearrange her Thursday work schedule to allow her to attend an evening class at a local college. Which of the following statements best reflects how to manage the conflict created by Maria's request?

B- "We need to discuss this first to see if there is some way you can be back most of the Thursdays in time for your course and still get the job done as well."

Selling Center

Brings together individuals from around the organization (marketing, customer service, sales, engineering, and others) to help salespeople do their jobs more effectively.

Modified Rebuy

Buyer is interested in modifying the product specifications, prices, or other terms it has been receiving from existing suppliers and is willing to consider dealing with new suppliers.

goals

Coming from the mission statement, goals are more specific targets the firm wishes to meet.

generic strategies

Common strategies pursued by business units across a variety of industries. Most common are low cost, differentiation, and niche or focus.

External environment:

Conditions outside of the company boundaries that affect the company strategy/ success.

upgrading or upsetting

Convincing the buyer to use a higher-quality product or newer product (similar to generating repeat sales.)

organization by customer type

Creation of separate sales teams to call on a particular customer type.

New-task purchases

Customer buying a relatively complex and expensive product or service for the first time.

Straight Rebuy

Customer is reordering an item it has purchased many times.

Corporate culture

Developed by a well-defined mission together with a successful corporate history and top management's values and beliefs. Shapes the attitudes and actions of employees and helps determine the kinds of plans, policies, and procedures salespeople and their managers can implement.

Ethics

Development of moral standards by which actions and situations can be judged.

organization by selling function

Different salespeople specialize in performing different selling functions.

Division and specialization of labor

Dividing a function into its component activities and assigning each activity to a specialist who can increase the efficiency with which almost anything is performed.

Subjective forecasting methods

Do not rely primarily on quantitative (empirical) analytical approaches in developing the forecast. -User expectations method: Also known as the buyers' intentions method because it relies on answers from customers regarding their expected consumption or purchases of the product. -Sales force composite method: Forecasting sales using the opinion of each member of the field sales staff. -Jury of executive opinion: Formal or informal internal poll of key executives within the selling company in order to gain their assessment of sales possibilities. -Delphi technique: Uses an iterative approach with repeated measurement and controlled anonymous feedback, instead of direct confrontation and debate among the experts preparing the forecast.

sales forecast

Estimate of the dollar or unit sales for a specified future period.

market potential

Estimate of the possible sales of a commodity, a group of commodities, or a service for an entire industry in a market during a stated period under ideal conditions.

customer delight

Exceeding customer expectations to a surprising degree. This is a powerful way to gain customer loyalty.

top-to-top selling

Executives at the very top of firms (even CEOs) are directly involved in selling to major strategic partner customers.

market opportunity

Exists whenever some human need is unsatisfied.

Customer-centric

Firms high in customer orientation because they have the customer at the center of their business model.

Internal (organizational) environment

Five broad categories: (1) goals, objectives, and culture, (2) human resources, (3) financial resources, (4) production capabilities, and (5) research and development capabilities.

consumer marketing

Focusing on developing relationships with individuals.

Perceived Risk

For a firm, when risk increases, the seniority level of participants and size of the buying center increase. Risk increases with the complexity of the product and situation, the relative importance of the purchase, time pressure to make a decision, and the degree of uncertainty about the product's efficiency.

financial quotas

Help salespeople to focus on the cost and profit implications of what they sell. Most commonly used financial measurements are gross margin, net profit, and selling expenses to determine profitability of product sales.

Ch. 6 You are the sales manager at uptick pharmaceuticals and have been reviewing the sales performance of your team. one of your best salespeople, William Bedford, has been performing significantly below expectations for the last six months. his sales are down and he is making few customer calls. You call him in for a meeting and he reports that his wife has been ill and he has been having to take on further responsibilities at home. He indicates she is doing better but expects her to be recovering for the 12-18 months. As a key salesperson in a large territory you know that is too long for the territory to be underrepresented. What should you do about Mr.Bedford? How would you address the needs of the sales territory?

I would relocate him to a different territory where he can still work and pitch in for the company. I would address the sales territory by working with the salespeople and making sure objectives are being met, providing feedback to superiors, and planning selling activities.

Trust

Important part of developing long-term relationships, and represents confidence that a salesperson's word or promise can be believed and that the salesperson has the long- term interests of the customer at the core of his/her approach to doing business.

preferred supplier

In general the supplier is assured a large percentage of the buyer's business and will get the first opportunity to earn any new business.

Ch. 3 One of the great debates in CRM is who should have ownership of the process. In many firms, IT people seem to be the guardians of CRM's secrets. This is because, as we have learned, a key facet of CRM is its information management capabilities. Who do you think should have ownership of CRM in a firm? Is it really necessary that CRM have an owner? What does ownership of the process imply in terms of actions and behaviors? What is the role of upper management in all this?

In many modern organizations, the CRM initiative was brought to bear through the IT department. This is because the process was initiated with the sale of CRM software to the firm. In such cases, often little strategic planning or organizational structure development has taken place prior to investment in CRM. When this happens, the odds that CRM will deliver its potential benefit to the firm are very low. To be successful, first and foremost CRM must have the backing of top management. They must be committed to making it work, and must provide opportunities for all organization members to effectively use and benefit from CRM. Second, the sales and marketing organizations need to be involved in all phases of the CRM initiative because the management of customer relationships is a key component of sales and marketing's expertise and value-adding capabilities. The key idea about "ownership" of CRM is that the main group charged with selecting, implementing, and maintaining the CRM initiative should not be the IT department. Instead, sales and marketing should be the major "bus drivers" of the CRM initiative because of its focus on customers, but sales and marketing must perform this role with the backing of top management and the support of other functional units in the organization (including IT).

Geographic organization

Individual salespeople are assigned to separate geographic territories.

Business-to-market (B2B) market

Industrial selling-The sale of goods and services to buyers who are not the end-users. -Relationship selling is much more predominant in the B2B market than in the B2C market.

Ch. 2 The chapter outlines the roles different members of a buying center play within an organizational buying context. Think of an example of a purchase process you were involved in as an end-user consumer (i.e., not an organizational buyer). Can you come up with examples of people who plated these same buying center roles in the context of your example? Try to connect as many specific people to specific buying center roles as you can within the context of your particular purchase.

Initiator: the vet determines what products I purchase. Users: the patient, my dog, the one using the product Influencer: the vet is influenced by the sales rep, who influences the doctor, who influences me to buy the product Buyer: the person who is responsible for buying products for the vet Decider: the hospital decides which products the doctor will provide Controller: me, who decides the budget for the medicine for my dog

selling agents

Intermediaries who do not take title or possession of goods they sell and are compensated solely by commissions from their principals.

manufacturer's representatives

Intermediaries who sell part of the output of their principals, the manufacturer they represent, on an extended contract basis.

Scenario planning

Involves asking those preparing the forecast a series of "what-if" questions, where the "what-ifs" reflect different environmental changes that could occur.

Ch. 3 Strategic partnerships often require direct peer-to-peer communication at the senior executive level between buying firm and selling firm. What are the advantages of having top corporate officers, CEOs in some cases, become directly involved in the selling process? What are the disadvantages? What types of challenges does such direct involvement present to the salesperson and sales manager responsible for the client?

It is becoming more and more common for executives to engage in "top-to-top" selling. For one thing, CEOs know that their involvement in the selling process can impress the very most important of customers. They also recognize a major potential disadvantage -- their involvement runs the risk of demoralizing their salespeople and sales managers. The sales organization may feel that its role in the firm has been greatly reduced if CEOs become involved in the selling process. Then, there is the question of compensation, especially if incentives are normally paid to salespeople. That is, to what degree should the sales force be compensated if a CEO closes a major deal in a top-to-top sale to a customer?

co-marketing alliances

Joint marketing and sales programs among suppliers, in order to sell integrated systems directly to the ultimate customer.

key accounts

Large and important customers.

Ch. 2 The organizational buying center varies as a function of size of the company and product or service being purchased. How does size of the company influence the composition of the buying center? How might the composition of the buying center differ for each of the following products? a. Purchasing a new computer for personal use b. Purchasing a new copy machine for the office c. Selecting a different public accounting firm d. Selecting a new textbook for a sales management course e. Choosing a different source for industrial oils and lubricants f. Purchasing a new machine g. Choosing a marketing research firm

Larger companies will have purchasing functions with professional personnel who specialize in the purchase of certain products. Smaller companies may have only one buyer for many lines of products. The composition of the buying center in small companies, for major purchases, will more likely involve top management and personnel from other areas. In a large company, the composition of the buying center will more likely include middle-management personnel and other buyers, again especially when major purchases are involved. Possible buying center composition for the following products or services: • A) Purchase of a new computer—personnel from purchasing, data processing, the management information department, and accounting. • B) Purchase of a new copying machine—personnel from purchasing, maintenance, accounting, secretaries, copy center, and possibly users. • C) Selecting a different public accounting firm—personnel from accounting, finance, and in some cases top management personnel such as the corporate treasurer or the comptroller. • D) Selecting a new textbook for a sales management course—in most colleges and universities, the professor in charge of the class. More will be involved if several professors will be teaching the course. In some schools, the department head and the professor might be involved. In the most involved case, all of the marketing faculty might have a vote or be involved in the choice. • E) Choosing a different source for industrial oils and lubricants—personnel from purchasing, maintenance, and possibly production or engineering. • F) Purchase of a new cardiology machine—head of the cardiology department, the cardiologist, and other personnel from the department. Physicians from other areas may be involved as well. Purchasing will take the specs and put out bids to acceptable suppliers. In such a case, getting on the list of acceptable suppliers is critical, of course. • G) Choosing a marketing research firm—personnel from marketing, product managers, and the internal marketing research department (if one exists). For a smaller firm, the president and other top executives may be involved.

functional relationships

Long-term relationships between buyer and seller based upon close personal friendships.

strategic partnerships

Long-term relationships in which the partners make significant investment to improve profitability of both companies and jointly achieve strategic objectives.

category management

Manufacturers work with resellers to maximize sales volumes and margins in the product categories in which the selling firm's products are represented.

Ch. 3 Is it possible for a firm to be successful without a market orientation? Can you come up with some examples of firms that are not very market-oriented but still are leaders in their competitive marketplace?

Market orientation is the operationalization or implementation of the marketing concept—that is, focusing on aligning all the various organizational processes and functions toward maximizing the firm's success in the competitive marketplace. Such firms turn to customers themselves for input in making strategic decisions about what products to market, where to market the products and how to get them to market, at what price, and how to communicate with customers about products (i.e. the marketing mix). In today's competitive marketplace, it is difficult to imagine a firm being successful over the long run that does not practice a market orientation. Even Microsoft, an organization that has relied heavily on creating markets through pushing forward the technology envelope, relies on customer feedback for modifications and new product ideas. Importantly, it is not just the mere act of doing market research that gives a firm a market orientation. Rather, it is the degree of appropriateness of the information garnered from the research, and then how the information is used in managerial decision making, that can separate market oriented firms from the others.

Marketing communication mix (promotion mix)

Marketing communication mix (promotion mix) Personal selling Advertising Sales promotion Direct marketing Public relation/publicity

Mass marketing

Mass marketing evolved in the early 1900s and was focused primarily on obtaining market share using limited segmentation and huge campaigns.

objectives

More specific targets than goals. Objectives should be specific, measurable, and realistically attainable.

Sales Activities/Tasks

Multifaceted and challenging activities that are part of the job of a salesperson, such as searching out leads, writing up orders, and learning about the product.

strategic business units (SBUs)

Multiple divisions of a company likely to have its own objectives and a distinct strategy for accomplishing them.

Natural environment

Nature can influence demand for products. A shortage of raw materials and the energy needed to make, package, promote, and distribute products can lead to limitation on sales of products and may lead to demarketing.

Ch. 3 The promotion mix (also known as the integrated marketing communications mix) consists of the various ways the firm communicates with its customers about its product offerings. These include personal selling, advertising, public relations and publicity, sales promotion, direct response and the like. Find an example of a company that you believe does a really good job of actually integrating these approaches to communications. What are things that make this company approach so successful?

Nike does a good job of integrating these approaches. Their advertising and campaigns take inspiration from those that have greater movements just beyond sports make that so successful. They use viral advertising and word-of-mouth. Also, they work with the NFL and NBA players to sport their products.

Ch. 2 What does it mean to be "nimble" as a salesperson and as a sales organization? Identify one or more sales organizations that you believe are nimble

Nimble firms: • Constantly monitor and communicate with customers. • Are proactive instead of reactive in meeting customer needs. • Practice adaptive selling by carefully sensing customer needs in each interaction and adapting the form and message of the communication to those needs. • Are flexible at all times and open to creative, outside-the-box solutions.

Key Account

One of a firm's largest customers (especially one with a buying center) whose potential business over time represents enough dollars and entails enough cross-functional interaction among various areas of both firms to justify the high costs of the team approach. Key accounts generally have a senior salesperson as the key account manager (KAM).

market exchanges-transactions

One-shot transactions that occur between a buyer and seller without much thought of future interaction.

Single source suppliers

Only one vendor used by a firm for a particular good or service to minimize the variation in quality of production inputs.

Team Selling

Organizational structure that makes the salesperson responsible for working with the entire selling team in order to manage the customer relationship.

Ch. 5 the use of scanner data collected at the time of checkout in supermarkets has increased dramatically in sales analysis.. one company has recruited families nationwide to participate in a panel study. when a shopper enters the checkout line, he or she gives the clerk a plastic card that is passed over the scanner. all items purchased that are scanned are recorded in the shopper's diary. oscar mayer, a wisconsin-based producer of meat, turkey, and seafood, has used different advertising campaigns in several markets. Oscar Mayer analyzes scanner data to determine which ad campaign was most effective. How else could Oscar Mayer and other manufacturers use scanner data? Of what value would scanner data be to salespeople for a company such as Oscar Mayer? To food retailers? What other industries could benefit from the same type of data?

Oscar Mayer and other manufacturers can use the marketing mix to measure the impact of their strategies, from product, price, promotion, and distribution. Scanner data would be incredibly valuable to Oscar Mayer and to food retailers in that it would be the first to show the most popular selling products and the prices paid. Other industries that could benefit from the same type of data would include apparel and toys.

lifetime value of a customer

Pay off in terms of cost savings, revenue growth, profits, referrals, and other important business success factors. It is possible to calculate an estimate of the projected financial returns from a customer, providing a very useful strategic tool for deciding which customers deserve what levels of investment of various resources (money, people, time, information, etc.)

Out Supplier

Potential supplier not on a buyer's approved list.

Just-in-time reorder and delivery

Process to help resellers reduce their investments in inventory and improve inventory turnover.

Ch. 5 Most sales managers hesitate to modify sales territories unless supported by compelling reasons. Likewise, sales managers are reluctant to make major changes in the sales compensation package. On the other hand, reassigning people from one territory to another is fairly common and often reflects a form of promotion. One expert contends that if a company's sales force knows the territory too well, then its time to reassign territories. What are the pros and cons of this approach? What factors related to the salesperson, the company, and the external environment might drive a company to reassign a sales territory?

Pros: -travel time is decreased and selling time is increased. -stronger local knowledge and decreased knowledge barriers Cons: -the ideal match cannot always be accomplished -changing territory assignments can upset salespeople -established territories must be content to change assignment incrementally and on a more limited basis. Factors: -Personal factors of employees: some employees may not want to change territory because perhaps the may have already settled down in a territory. Shifting their family can be a concern. -Team: some may have developed a good rapport with colleagues in the territory. They can be upset over the reassignment. -Customer relationship: some employees may be developed good rapport with customers. A change like this can lead to loss of account.

Extrinsic Rewards

Rewards bestowed on the salesperson by the company.

Extrinsic rewards

Rewards controlled and bestowed by people other that the salesperson, such as managers or customers. They include such things as pay, financial incentives, security, recognition, and promotion (rewards generally related to lower order human needs).

Intrinsic Rewards

Rewards controlled by the salesperson within themselves. They include such things as feelings of accomplishment, personal growth, and self-worth (rewards generally related to higher order human needs).

Intrinsic Rewards

Rewards inherent to satisfaction derived from elements of the job or role itself.

Ch.6 The Fire Protection Systems, a manufacturer of fire prevention systems for industrial applications, have been told they will now have to sell small fire extinguishers to the retail market. They have never sold in the retail market, and the company is going up against much larger competitors that have sold in that market for many years. What role problems are likely to occur?

Role problems that they are likely to run into is role stress. Being that this is their first time selling in a retail market, they are bound to experience a good amount of stress. Also, they can deal with demanding customers. Customers can demand more services, more honesty, more price commissions, and more time.

workload method

Sales force size is determined by assuming all sales personnel should shoulder an equal amount of work, and management estimates the work required to serve the entire market.

incremental method

Sales force size is determined by assuming sales representatives should be added as long as the incremental profit produced by their addition exceeds the incremental costs.

breakdown method

Sales force size is determined by the average salesperson treated as a salesperson unit, and each salesperson unit is assumed to possess the same productivity potential.

sales quotas

Sales goals assigned to a marketing unit for use in managing sales efforts.

account analysis

Sales potential for each customer and prospect is estimated for a proposed territory.

telemarketing

Selling functions are performed over the telephone.

full-line selling

Selling the entire line of associated products.

product organization

Separate sales forces are in place for each product or product category in their line.

line and staff organization

Several sales management activities, such as personnel selection, training, and distributor relations, are assigned to separate staff specialists.

cross-selling

Similar to full-line selling but reflects selling products that may not be related.

iceberg principle

So named because only about 10 percent of an iceberg's mass is above the water level (analogous to the symptoms of a problem). The other 90 percent of the berg is below the surface (analogous to the real problem), and not always directly below the tip either.

Social and cultural environment

Social values set the standards for ethical behavior.

enterprise resource planning (ERP)

Software that links processes such as bid estimation, order entry, shipping, billing systems, and other work processes.

Ch. 2 Telecommuting and using a virtual office are major aspects of many professional sales positions. How do you feel about telecommuting and a virtual office in a job? What aspects of telecommuting and a virtual office are you most and least attracted to?

Some thoughts, depends on your strengths/weaknesses/values: Although telecommuting sounds utopian, it is not always as effective in practice. On the positive side, telecommuting and virtual offices give the freedom and flexibility to work from home and can make the logistics of organizing meetings easier. However, on the negative side, telecommuters can feel cut off from team members and the company's culture. Also, it is difficult to communicate one's full information or meaning over the phone or via e-mail. Even if salespeople work remotely, it is a good idea to have in-person meetings at least several times a year to make everyone feel they are part of the company.

Ch. 2 Write pros and cons on the top right. From your own perspective, come up with as many issues as you can on both sides regarding relationship selling as a career choice for you. Be sure to note why you list each item as you do.

Some thoughts: Depends on your strengths/weaknesses/values: • Pros: • Job autonomy—The salesperson is free to get the job done in his or her own way and spend time as he or she chooses, as long as he or she gets good results. • Job variety—Selling is a complex job that requires creative thinking. The salesperson will never get bored. • Financial rewards—These rewards can be intrinsic (a feeling of being satisfied) and extrinsic (more money in the salesperson's pocket). • Favorable working conditions—It is often easier to work from home and telecommute rather than go into a corporate office. Telecommuting helps to reduce the potential for work-family conflict. • Highly visible results—A great thing when the results are good, as recognition and rewards follow. • Ability to move up in the organization—There are promotion opportunities along a sales management or marketing track. A salesperson can also be given a more attractive territory or key account as a promotion. • Cons: • Stigma or negative stereotype associated with selling—May cause lack of respect or misunderstanding from others. • Pressure—Constant pressure to make numbers, especially if the salesperson is being paid on a straight commission. • Highly visible results—Not such a great thing if a salesperson is not making quota or is in the bottom ranks of performance. His or her job could quickly be in jeopardy. • Frequent travel—It can be difficult on family relationships if frequent overnight travel is required.

Objective forecasting methods

Sophisticated quantitative (empirical) analytical approaches in developing forecasts. -Market test: Involves placing a product in several representative geographic areas to see how well it performs and then projecting that experience to the market as a whole. -Time-series analysis: Analysis of historical data to develop a prediction for the future, with the relationship between sales and time as the basis of the forecast for the future. -Moving averages: Relies on the analysis of historical data to develop a prediction for the future, sometime using an average of several years. -Exponential smoothing: Type of moving average, but instead of weighting all observation equally, exponential smoothing weights the most recent observations heaviest. -Decomposition: Typically applied to monthly or quarterly data where a seasonal pattern is evident and the manager wishes to forecast sales not only for the year but also for each period in the year. -Statistical demand analysis: Build a predictive model and assess fit. Attempts to determine the relationship between sales (dependent variable) and the important factors (independent variables) affecting sales to forecast the future.

Commodity Products

Standardized, nontechnical items.

Ch. 2 Review the top 20 key success factors for relationship selling as listed in Exhibit 2.2. Which of these factors are currently your strongest points? Which need the most work? How do you plan to capitalize on the strengths and improve on the weaknesses?

Strengths: • listening skills • my tenacity • personal planning • time management Weaknesses: • creativity • decision-making ability I plan on capitalizing on my strengths by building and practicing on it. I plan to improve on my weaknesses by implementing more of it into my everyday life.

Costs of a Sales Call

Summation of nonselling activities and selling activities.

outsourcing the sales force

Term used to indicate use of agents.

Adaptive Selling

The altering of sales behaviors during a customer interaction or from one situation to another based on information the sales rep gathers about the nature of the selling situation.

Motivation

The amount of effort the salesperson desires to expend on each activity or task associated with the job.

mission statement

The answer to the most basic questions about a firm's reason for being.

Job Satisfaction

The characteristics of the job that the salesperson finds rewarding, fulfilling, and satisfying, or frustrating and unsatisfying. It is generally viewed as consisting of different dimensions and include: (1) the job itself, (2) co-workers, (3) supervision, (4) company policies and support, (5) pay, (6), promotion and advancement opportunities, (7) customers.

data warehouse

The compilation of information obtained from touchpoints and transformation of that information into useful information for customer strategy development.

Perceived role ambiguity

The degree to which a salesperson believes they do not have the information necessary to perform the job adequately.

perceived role conflict

The degree to which a salesperson's believes the role demands of tow or more of his or her role partners is incompatible.

Role Accuracy

The degree to which the salesperson's perceptions of his or her role partners' demands—particularly company superiors—are accurate.

Customer Orientation

The firm places the customer in the center of all strategic decisions and firm activities.

Marketing mix

The four elements of product, distribution, price, and promotion.

Autonomy

The freedom of action and opportunities for personal initiative. The degree of independence the salesperson can exercise in making his or her own decisions in the day-to-day operation of the job.

sales analysis

The gathering, classifying, comparing, and studying of company sales data.

Touchpoints

The intersection of business events via a channel using a medium where the selling firm touches the customer in some way, thus allowing for information about customers to be collected.

strategic direction

The mission and goals on which a firm's marketing strategy may be built and implemented.

Customer relationship management (CRM)

The most prevalent formalization of a customer-centric culture in which the comprehensive business model for increasing revenues and profits focuses on customers. Three goals of CRM are customer retention, acquisition and profitability.

span of control

The number of people each manager supervises.

Market Orientation

The operationalization or implementation of the marketing concept.

Users

The people in the organization who must use or work with the product or service.

Buyers

The people who actually contact the selling organization and place the order.

Gatekeepers

The people who control the flow of information to other people involved in the purchasing process.

Controllers

The people who determine the budget for the purchase.

Initiators

The people who perceive a problem or opportunity that may require the purchase of a new product or service and thereby start the buying process.

Influencers

The people who provide information for evaluating alternative products and suppliers.

Deciders

The people with the final authority to make a purchase decision.

sales potential

The portion of the market potential that a particular firm can reasonably expect to achieve.

Total quality management (TQM)

The process of continually working to eliminate errors and defects in all aspects of a company's products and processes.

Formalization

The process of setting up structure, processes and tools, and managerial knowledge and commitment in support of the market oriented or customer-centric culture.

Ch. 2 In the past, salespeople tended to have the edge over most buyers in terms of information. However, over the past 15 years access to timely and accurate information related to their business has changed how purchasing agents view their jobs. For one thing, they have been able to get a better handle on their costs and can better determine which items to buy and from whom. How has this proliferation of information affected the relationship, both interpersonally and professionally, between purchasing agents and the sales reps calling on them?

The proliferation of information available to all purchasers has radically altered the relationship between purchasing and sales, with purchasing agents expecting a different kind of approach from the salespeople who call on them today. Nowadays, purchasers look for salespeople who have a thorough knowledge of their customers' business and seek to provide them with solutions—not just products. They want to do business with great salespeople and their companies over the long term, working together to build each other's businesses through win-win approaches.

Distinctive competencies

The quality or attribute of the organization that sets it aside from its competitors. How is it, or how will it be, different from the rest of the pack.

Business-to-consumer (B2C) market

The sale of goods and services to end-user consumers (retail selling).

Demarketing

The sales force is required to help administer rationing programs that allocate scarce supplies according to each customer's purchase history.

Ch.1 Ethical Question: Describe the typical salesperson as illustrated in movies, books, and television shows. Why does that image exist as the stereotypical salesperson (be specific)? What role does ethics play in perpetuating the stereotype? Whose responsibility is it to see that a company's code of ethics is carried out?

The stereotype is either Herb Tarleck, the plaid-suited bumbling salesman of WKRP in Cincinnati, or perhaps the pitiful figure Willy Loman of the Arthur Miller play Death of a Salesman. Stereotypes exist because so many people go into sales for the wrong reasons and are not prepared for a successful and ethical career, and because the selling profession of the past has not been focused on developing customer relationships. In such situations, the pressure to achieve in order to succeed causes weaker salespeople to give in and act unethically. Selling ethically can provide a company with a competitive advantage, for as the reputation is created, it opens doors and eliminates the suspicion that accompanies the stereotypes. While the "captain of the ship" responsibility principle means that it is senior management's responsibility to see that the company's code of ethics is carried out, the ultimate responsibility really rests with each individual salesperson and sales manager.

Technological environment

The technical environment can create the ability to improve the processes of managing sales and accounts, provide opportunities for product development, and improve transportation, communication, and data processing. Salesforce.com, Hubspot.com, other examples?

Ch.4 The chapter mentions the theory of transaction cost analysis (TCA). What role does TCA play in the decision to use a company sales force rather than independent manufacturers' agents?

The theory of transaction cost analysis holds that, when substantial amounts of transaction-specific assets are necessary to sell a manufacturer's product, the cost of using and administering independent agents (i.e., the manufacturer's transaction costs) are likely to be higher than the costs of hiring and managing a company sales force. Transaction cost factors include rep's manufacturer-specific investments, difficulty of evaluating rep's performance, and customer loyalty to the rep. Firms that anticipate a costly and difficult conversion process from manufacturers' reps to company sales force appear to exhibit substantial inertia in their choice of using an agency sales system, even if they are highly dissatisfied with their system.

End-User Consumer

The ultimate user of the goods and services for personal use.

data mining

The use of software techniques to learn more about current and potential customers from large data warehouses of information.

Sales volume quotas

These quotas emphasize dollar sales or some other aspect of sales volume.

firing a customer

This can occur when a customer exhibits a low predicted lifetime value and resources are better used elsewhere.

transaction cost analysis (TCA)

This is a theory that states when substantial transaction-specific assets are necessary to sell a manufacturer's product, the costs of using and administering independent agents (i.e., the manufacturer's transaction costs) are likely to be higher than the costs of hiring and managing a company sales force.

Sustainable competitive advantage (SCA)

This is the keystone of a business-level strategy about how a business will compete it its market based on the set of distinctive competencies exhibited b the firm, the quality or attribute of the organization that sets it apart from its competitors.

80:20 principle

This means it is not at all unusual to find 80 percent of the customers or products accounting for only 20 percent of total sales.

Legal-political environment

Three broad categories of laws are relevant to sales programs: (1) antitrust, (2) consumer protection, and (3) equal employment opportunity. These are aimed primarily at preserving and enhancing competition among firms in an industry.

Ch. 4 With the advent of digital marketing and inbound marketing—following customers as they respond to digital outreach and touch your website—how will traditional sales roles change?

Traditional sales is very seller-centric. It's an approach that relies on grabbing attention by interrupting what people are doing, telling them why they should be interested in what you offer, and then expecting them to make a purchase on the spot. Does it work? Sometimes. However, it works against the natural purchasing cycle that people use today and is no longer very efficient.

Marketing Concept

Turning to consumers themselves for input in making strategic decisions about what products to market, where to market the products and how to get them to market, at what price, and how to communicate with consumers about the products.

matrix organization

Type of team selling in which direct reports and supporting internal consultants bring collective expertise to bear for the client or customer.

supply chain alliances

Used to strengthen relationships with major customers, by involving customers in the development of joint information and reorder systems.

Integrated marketing communications (IMC)

Various ways a firm strategically communicates its message about its products to the marketplace.

Line organization

Vertical organization in which the chain of command runs from the chief sales executive down through levels of subordinates. Each subordinate is responsible to only one person on the next higher level, and each is expected to perform all the necessary sales management activities relevant to his or her own level.

Salesforce.com: Can you recall specific features of this CRM system that interested you? If not, take a look at a couple of videos on the site—we reviewed several in class. Trailhead for Students

WORK FROM ANYWHERE. Cloud-based CRM systems such as Salesforce (Learn more: What is Salesforce?) mean every user has the same information, all the time. Your sales teams out on the road can check data, update it instantly after a meeting, or work from anywhere. The same information is available to anyone who needs it, from the sales team to the customer service representatives.

customer value

When customer weighs the costs (monetary and otherwise) of a relationship with a seller, the benefits realized from that relationship outweigh the costs.

customer loyalty

When customers are highly satisfied with the relationship and the product offering, and are very unlikely to switch to another company and its products or brands.

Drivers of Change

in reinventing sales organizations so they can compete successfully. Building long-term relationships with customers. Creating sales organizational structures that are more nimble and adaptable to the needs of different customer groups. Gaining greater job ownership and commitment from salespeople. Shifting sales management style from commanding to coaching. Leveraging available technology for sales success. Better integrating salesperson performance evaluation.

Ch. 2 Pick any 3 of the selling activities presented in Exhibit 2.3 that you would most like to perform and then pick any 3 you would least like to perform. Explain your rationale for listing each as you did.

• Most like to perform: • Listen: Im good at listening to people's needs • Create newsletters- I've done this before and the process is enjoyable • Use Internet- Something I'm comfortable and familiar with • Least like to perform • Travel out of town- I get anxiety when traveling • Train new sales reps- Im not experienced with training others • Entertain with leisure- I'm not a good host