Sales Management

One person talking to one customer, face to face or by phone, to make a sale.

Its strengths are interaction and adaptability; its weakness is cost. A sales visit costs far more than an email.

Salespeople who respond to demand that already exists: the customer has decided to buy and they process the order.

Inside order-takers (a shop assistant), delivery salespeople (the milk round), outside order-takers (calling on retailers to restock).

Salespeople who persuade people to buy without taking the order themselves.

The missionary salesperson: a pharmaceutical rep who persuades a doctor to prescribe a drug the pharmacy then sells.

Salespeople whose job is to win new business.

Front-line: new business, organisational and consumer salespeople. Sales support: technical support and merchandisers help them.

Salespeople who educate and persuade but do not take orders.

Order-creators in the book's types of selling.

Sales support staff who look after the product in the shop: displays, stock levels, shelf position.

Common in fast-moving consumer goods sold through retailers.

Running the company around what you have made: produce it, then push sales to move it.

The order is production, sales, customers. Emphasis on the seller's needs.

Running the company around what customers need: find out first, then produce, then sell.

The order is customers, production, sales. Emphasis on the customer's needs. This is the marketing concept in practice.

The idea that a business succeeds by finding out what customers need and satisfying it better than competitors, rather than by selling what it happens to make.

Companies moved from production orientation, to sales orientation, to marketing orientation. Selling is one part of the marketing programme.

The pattern most products follow: introduction, growth, maturity, decline.

Profit turns positive after introduction, peaks in maturity before sales do, and shrinks under competition. Advertising matters most early; personal selling matters more as the market matures.

Launching at a high price to take the maximum profit early, then lowering it.

Works in the growth stage when a new product can command a premium.

The four things a company decides: product, price, place (distribution) and promotion.

Personal selling sits inside promotion. Sales strategy must fit the other three.

Splitting a market into groups of customers with similar needs, so each can be served differently.

Targeting is choosing which segments to go after.

Four strategic marketing objectives for a product, each with its own sales objective and sales strategy.

Build: more volume, high call rates, prospect. Hold: maintain, medium focus. Harvest: cut selling costs, call only on profitable accounts. Divest: clear stock fast with discounts.

Goals, Objectives, Strategies, Projects, Actions: a planning method that links what the organisation wants to what each person does today.

Each level is the means to the one above it. The slides' version of the book's MOST.

Mission, Objective, Strategy, Tactics: the planning process from the general to the specific.

The book's acronym for the same idea as GOSPA.

A systematic review of the market, customers, competitors and the company's own mix, done before planning.

Internal audit looks at the company; external audit at the wider environment (PEST).

Political, Economic, Socio-cultural, Technological: the four broad outside forces a firm scans.

Extended to SLEPT (Legal), PESTLE (Environmental) and STEEPLE (Ecological). Same tool, longer list.

Strengths, Weaknesses, Opportunities, Threats.

Strengths and weaknesses are internal; opportunities and threats are external. The TOWS matrix turns the four into actions.

The sales manager's estimate of what will be sold in the short, medium and long term.

The starting point for all company budgeting: production, HR, finance and R&D all plan from it.

What the sales manager expects to spend to hit the forecast: salaries, selling expenses, administration, commissions.

Differences between budget and actual, favourable or not, are analysed and fed into the next plan.

Planning that starts from the company's own objectives, capabilities and resources.

The classical, financially driven approach. Structured but less customer-oriented than outside-in.

Planning that starts from the customer: cost per sale by segment (current, lapsed, prospect, new), then targets and tailored strategies for each.

Customer-oriented and increasingly favoured.

Aiming marketing effort at the channel: get wholesalers and retailers to stock the product, and they will sell it on.

Relies on personal selling and trade promotion.

Aiming marketing effort at the final consumer so they ask for the product, and demand pulls it back through the channel.

Relies on advertising. Consumers ask retailers, retailers ask wholesalers, wholesalers ask the producer.

The blend of advertising, personal selling, sales promotion and public relations a company uses.

Its balance depends on the type of market, the step in the buying process, push versus pull, and the life-cycle stage.

I buy from you if you buy from me.

More common in organisational markets than consumer ones.

A systematic review of design, production and purchasing to cut a product's total cost without hurting its function.

Cheaper components, standard parts, less cycle time, automation.

Everything an asset will cost its owner over its life: purchase, later investment, yearly running costs, less what it sells for at the end.

Buyers who think this way will pay more up front for lower running costs.

The factors a buyer uses to judge and compare alternatives.

Economic (performance, reliability, price), social (status, belonging) and personal (how the product fits the buyer psychologically).

The long, careful buying process used when the need is new, the purchase is expensive and uncertainty is high.

Contrast limited problem-solving (some experience, likely to stay with the known brand) and automatic response (habit).

Buying by habit with almost no thought.

Where companies with strong brands want their customers to end up.

The human-like character a brand is given so that people feel something about it.

Aimed at an emotional response in a chosen segment.

A group whose views a person uses as a standard: family, friends, colleagues, people they admire.

One of the social influences on buying, with social class, culture and family.

The pattern of living shown in a person's activities, interests and opinions.

Used to segment consumers into groups such as young sophisticates or penny-pinchers.

Everyone in an organisation who takes part in a buying decision. Also called the buying centre.

Bonoma and Webster's six roles: initiators, users, deciders, influencers, buyers, gatekeepers.

People who control the flow of information to the decision-makers, such as a secretary or a purchasing officer who screens suppliers.

A salesperson who cannot get past the gatekeeper never reaches the decider.

How new the buying situation is: straight re-buy, modified re-buy or new task.

Defined by newness, number of alternatives, uncertainty and how much information is needed.

Buying the same goods on the same terms from the same supplier.

Routine. The in-supplier's job is to make it easy; the out-supplier's job is to disturb it.

Buying goods bought before, but changing the supplier or some term of the order.

An opening for a new supplier.

A purchase the customer has no previous experience of.

Longest process, most people involved, most information needed.

Products and services for maintenance, repair and operation: spanners, welding equipment, lubricants.

One of the four product types with materials, components and capital plant.

The way a buying organisation becomes gradually tied to one supplier through that supplier's early involvement and technical help.

Get in at phase one and the later phases lean your way.

A long-term lease that pays off the whole value of the asset over the contract; total payments usually exceed the purchase price.

Contrast an operating lease, which is shorter and cancellable.

The buyer takes the initiative and goes looking for suppliers, instead of waiting to be sold to.

The slides also use the term for marketing that makes consumers seek the company out, as in Patagonia's Don't Buy This Jacket.

Buying so that materials arrive exactly when needed, with almost no stock held.

Makes reliable delivery worth more than a low price, and ties buyer and supplier closely together.

A continual effort to find and remove errors in production, supply and customer experience, with everyone trained for it.

Certifications such as ISO 9000 signal it to buyers.

Two businesses that team up so both reach their goals, each keeping its independence.

Uber and Spotify; Grameenphone and Upay. Buyers increasingly treat trusted suppliers as strategic partners.

One department buys for the whole organisation, pooling orders to get better prices.

Changes who the salesperson must reach and raises the stakes of each deal.

Giving the largest customers a dedicated relationship and special service.

A response to the expanding power of major buyers such as big retailers.

Managing a whole product category, not single brands, to maximise the retailer's return from the shelf.

Big retailers demand it from suppliers.

Using laptops, tablets, phones and sales software to plan journeys and accounts, manage leads and report.

Also EDI, video conferencing and CRM technology.

Treating selling as a core, cross-functional process built on three things: intelligence, interface and integration.

The shift from order taker to order getter, with sales integrated into CRM strategy.

Bringing everyone involved in delivering the final product into one coordinated system.

Lack of coordination between sales and the supply chain is the book's warning example.

The route goods take from supplier to customer.

Direct when sold straight into the customer's process; indirect when sold to a wholesaler or agent.

An intermediary buying in large quantities and selling on in small ones.

The basic job of a wholesaler.

Getting the right amount of the right product to where demand is: order processing, materials handling, warehousing, inventory control, transportation, packaging.

Also called logistics. It starts from the customer and works back to the source of supply.

The franchisor licenses a franchisee to run a business under its name and system, for a fee and royalties.

A vertical marketing system. Manufacturer to retailer (car dealers), manufacturer to wholesaler (soft-drink concentrate), wholesaler to retailer (SPAR), service firm to retailer (fast food).

Independent retailers who band together behind a wholesaler to buy in bulk and share a symbol.

Also called symbol shops. SPAR is the example.

Marketing aimed at the channel, wholesalers, retailers and distributors, rather than at the consumer.

Discounts, better margins and freebies to make sure the product is stocked.

Temporary offers that increase interest or demand: price cuts, coupons, gifts, competitions, cash bonuses.

Consumer promotions pull; trade promotions push; salesforce promotions motivate the sellers.

A gift the customer pays part of, so the promotion covers its own cost.

One of the premium offers, with on-pack gifts, continuities, coupon plans and free samples.

Sets of merchandise a customer collects over a series of purchases.

Rewards repeat buying.

Entertaining clients at sporting or public events to promote business.

Seats or a box at a Test Match. A form of exhibition and event activity.

The one feature or benefit that makes a product different from every competing brand.

Death Wish Coffee sells the world's strongest coffee while others claim the smoothest.

The different strengths of communication needed to convey a USP, from the written word up to seeing the product under extreme test.

Exhibitions sit near the strong end, which is why they suit products that must be seen working.

Planned communication from an organisation to its publics to build or protect its image.

Not free advertising, not propaganda, not publicity. Its publics include the community, employees, government, the financial community, distributors, consumers, opinion leaders and the media.

A country's record of all economic transactions with the rest of the world over a period, usually a year.

Three accounts: current, capital and financial. They always sum to zero.

Exports of goods minus imports of goods.

A deficit is not automatically bad if the imports are machinery and technology that raise future capacity. A surplus is not automatically good if it reflects weak demand at home.

Trade in physical goods you can see and touch: garments, cars, rice, machinery.

Invisible or nonvisible trade is services: banking, tourism, transport, consultancy, education, software.

Being able to produce something with fewer resources than another country.

Bangladesh making 100 shirts per worker against Austria's 70.

Being relatively better at something, measured by opportunity cost, even if another country is better at everything.

Each country should specialise where its opportunity cost is lower; then both gain from trade. Ricardo's theory of comparative costs.

What you give up to produce something: the other thing you could have made instead.

Comparative advantage is about opportunity cost, not raw productivity.

The edge from entering a market early: brand recognition, distribution and loyalty built before rivals arrive.

One of the ten reasons firms go international.

How much a society accepts unequal distribution of power.

High: hierarchy, clear authority, status for managers. Low: equality, direct communication, participative management.

How uncomfortable a society is with ambiguity and risk.

High: rules, clear information, security. Low: comfort with innovation, experimentation and risk.

Whether a society values persistence, saving and future rewards over tradition and immediate results.

Changes how promotional messages and investment pitches should be framed.

How freely a society lets people satisfy desires and enjoy life, versus restraining them through social norms and self-control.

Hofstede's sixth dimension.

Selling essentially the same product, strategy and positioning in every country.

Cheap and consistent, but may ignore local culture, preferences and regulation.

Changing the product or its marketing for each local market: product, packaging, language, taste, price, distribution, advertising, size.

Better local fit, higher cost, more complex to manage.

Think globally, act locally: keep the global brand but adapt selected elements for each market.

McDonald's India's vegetarian burgers, prepared away from the meat.

What an imported product really costs once shipping, insurance, tariffs, taxes, distributor margins and exchange effects are added to its price.

The book's example: $100 becomes $125.

A tax a government charges on goods coming in from abroad.

Ad valorem (percentage of value), specific (per unit) or compound (both). Raises the price of imports and protects home producers.

An arrangement between two companies to undertake a mutually beneficial project while each stays independent.

Five tests: tied to a core goal, protects a core competency, blocks a competitive threat, creates strategic options, mitigates a major risk.

Two companies combining resources in a shared undertaking, either as a new jointly owned entity or as separate entities operating together.

A common way into China, with the risks of bureaucracy and weak rule of law.

Letting a foreign company use your trademarks, know-how, processes or patents in exchange for royalties.

Royalties are typically 1 to 15 percent. The licensee keeps more freedom than a franchisee.

The price one part of a company charges another part, in another country, for goods or services.

Set to move profit toward low-tax countries and minimise import duty, which is why tax authorities watch it closely.

A firm or person who obtains orders on behalf of an exporter for a commission; the exporter remains the principal.

The most common form of overseas representation. Must be chosen, trained and treated as a partner.

An intermediary who buys the goods, holds stock and resells them in the foreign market.

Unlike an agent, the distributor owns what it sells.

Firms that handle the whole exporting job on behalf of a manufacturer.

An indirect route into foreign markets.

The General Agreement on Tariffs and Trade, 1947: a provisional set of rules to cut tariffs and quotas, with no institution behind it.

Replaced by the WTO in 1995.

The World Trade Organization, 1995: a permanent body of 164 members that sets trade rules, covers goods, services and intellectual property, and settles disputes with binding decisions.

Faster and enforceable where GATT was slow and non-binding.

Personal connections in China that a person draws on for resources or advantage in business.

Literally pass the gate and get connected. Built through introductions, favours and gifts; favours are banked and must be returned.

1. Planned
2. Personalized
3. Influence
4. Satisfaction

1. Interactive
2. Adaptive
3. Complex arguments
4. Relationships
5. Opportunity to close

1. Customer retention and deletion
2. Database and knowledge management
3. Customer relationship management
4. Marketing the product
5. Problem solving and system selling
6. Adding value / satisfying needs

1. Listening skills
2. Follow-up skills
3. Adapting sales style
4. Tenacity
5. Organisational skills

1. Order-takers: inside, delivery, outside
2. Order-creators: missionary
3. Order-getters: front-line (new business, organisational, consumer) and sales support (technical, merchandisers)

1. Sales: production → sales → customers
2. Marketing: customers → production → sales

1. Introduction
2. Growth
3. Maturity
4. Decline

1. Build
2. Hold
3. Harvest
4. Divest

1. Goals
2. Objectives
3. Strategies
4. Projects
5. Actions

1. Set objectives
2. Determine operations
3. Organise
4. Implement
5. Measure results
6. Re-evaluate and control

1. Market situation analysis
2. Sales potential and forecasting
3. Strategy generation and selection
4. Budgeting, implementation and control

1. Political, Economic, Socio-cultural, Technological
2. SLEPT adds Legal
3. PESTLE adds Environmental
4. STEEPLE adds Ecological

1. Fewer buyers
2. Close long-term relationships
3. More rational
4. To specific requirements
5. Reciprocal buying
6. Riskier
7. More complex
8. Negotiation matters more

1. Who is important in the decision?
2. How do they buy?
3. What are their choice criteria?
4. Where do they buy?
5. When do they buy?

1. Need identification
2. Information gathering
3. Evaluation of alternatives
4. Selection
5. Post-purchase evaluation

1. Extensive problem-solving
2. Limited problem-solving
3. Automatic response

1. Initiators
2. Users
3. Deciders
4. Influencers
5. Buyers
6. Gatekeepers

1. Recognise the problem
2. Determine characteristics and quantity
3. Search for and qualify sources
4. Acquire and analyse proposals
5. Evaluate and select suppliers
6. Select an order routine
7. Performance feedback and evaluation

1. Straight re-buy
2. Modified re-buy
3. New task

1. Materials
2. Components
3. Capital plant and equipment
4. MROs

1. Just-in-time
2. Centralised purchasing
3. Reverse marketing
4. Leasing
5. Total quality management

1. Behavioural: expectations, negotiation avoidance, major buyers, globalisation, fragmentation
2. Technological: automation, virtual offices, electronic channels
3. Managerial: direct marketing, sales-marketing cooperation, training

1. Intelligence
2. Interface
3. Integration

1. The market
2. Channel costs
3. The product
4. Profit potential
5. Channel structure
6. Product life-cycle
7. Non-marketing factors

1. Direct
2. Selective
3. Intensive
4. Exclusive

1. Order processing
2. Materials handling
3. Warehousing
4. Inventory control
5. Transportation
6. Packaging

1. Job
2. Batch
3. Flow
4. Process

1. Multiples
2. Variety chains
3. Co-operative societies
4. Department stores
5. Independents
6. Mail order
7. Direct selling

1. Manufacturer to retailer
2. Manufacturer to wholesaler
3. Wholesaler to retailer
4. Service firm to retailer

1. Intangible
2. Simultaneously produced and consumed
3. Not standardised
4. Cannot be stocked
5. Perishable
6. People, Process, Physical evidence

1. Consumer (pull)
2. Trade (push)
3. Salesforce (incentives)

1. Free advertising
2. Propaganda
3. Publicity

1. Current account
2. Capital account
3. Financial account

1. Market expansion
2. Increase sales
3. Increase profit
4. Access to resources
5. Lower production costs
6. Diversification of risk
7. Competitive pressure
8. Follow customers
9. Technology and knowledge
10. First-mover advantage

1. Power distance
2. Individualism vs collectivism
3. Masculinity vs femininity
4. Uncertainty avoidance
5. Long-term orientation
6. Indulgence vs restraint

1. Standardization
2. Adaptation
3. Glocalization

1. Indirect: agents, distributors, licensing, export houses
2. Direct: subsidiary, joint venture, direct selling

1. Ad valorem
2. Specific
3. Compound

1. Tied to a core goal
2. Critical to a core competency
3. Blocks a competitive threat
4. Creates strategic options
5. Mitigates a significant risk

1. Advertising cuts selling cost up to 30 percent; not advertising raises it up to 40 percent
2. Landed cost: $100 becomes $125
3. Tariff: $10 trousers become $11 to the importer, $20 to the consumer
4. Transfer price: $1m cost + 15 percent = $1,150,000
5. Licensing royalties 1 to 15 percent
6. Exporting is under 20 percent of turnover
7. GATT 1947 (123 parties); WTO 1995 (164 members)