m



  
› Divide and coordinate activities so that
the group can accomplish objectives
better than if acting as individuals.
› Specialization of Labor
› Stability and Continuity
› Coordination and Integration
› Goals › Structure
 
   

› Concentrate: Become more proficient at
one thing.

› Assign tasks according to ability.

› Line/Staff organization is most common.

  
   

› ×ou can organize around activities, not

around individuals.

› The organization survives the individuals

within it.
 
    

› Activities of the sales force must be
integrated with customer needs and
concerns.
› Selling activities must be coordinated
with other departments: production, product
development, logistics, finance.
› Selling tasks among specialists must be
coordinated.
 „
 



› Geography: States/Regions, Downtown/Suburban

› Product Type: ×ard Equipment vs. Power Tools

› Customer Type: Industrial/Consumer,

Hospitals/Schools, Wholesalers/Retailers

› Selling Function: Prospecting, presenting,

servicing
  





    

Which is right for you?

   
› Ôanufacturers Representative
› Pure Commission; No Ownership
› Advantages:
› Established Contacts
› Familiarity with Technology
› Fixed costs spread over several manufacturers
› Strictly variable cost to manufacturer (No cost unless they
sell.)
› Selling Agent
› Acts as sole sales agent of the manufacturer, rather
than just in one geographic area or product.
› Broader authority.
 
 


› Substantial Transaction-Specific
Investments: Lock-in (e.g. Showroom)
› Agency Theory: Agent looks out for self
first and foremost
› Alignment of interests
› Altruism
› Hiring own sales people limits flexibility
 d

  
› Simplest and most common form
› Each salesperson handles all sales
functions in the territory.
› Advantages:
› Cheaper: travel, management
› One point of contact for customer
› Disadvantages:
› No division/specialization of labor
› Salespeople focus on products/customers
that benefits themselves.
 m
 
  
› used primarily by firms with large and diverse
product lines, and firms with highly technical
products.
› Advantages:
› Familiarity with technology and applications
› Can lead to closer coordination with production
› Better control: can allocate across company lines.

› Disadvantages:
› Duplication of effort › higher selling costs
› Need more coordination
› Ôultiple contact people for customers
 


  
› Advantages:
› Better understanding of customers¶ needs
› Can be trained to sell to particular customers (e.g.
Hospitals vs. Schools)
› Can gain insight into product applications,
innovations, new products
› Ôanagers can vary sales force size to market

› Disadvantages:
› Higher selling expenses
› Large customers can have multiple sales contacts
 

   
  
› Acquiring new customers (development
specialists) vs. maintaining and servicing
existing customers
› Telemarketing: Inside/Outside Sales
› Prospecting/Qualifying: turn leads over
› Servicing problems quickly: hotlines
› Seeking repeat sales: especially small & remote
customers
› Quicker communication on noteworthy
developments
› Targeted advertising, direct mail, toll-free lines,
web pages
  
 

› Salesperson must be a business manager:

› Be able to customize products/services
› Knowledgeable about strategic objectives
› Can build and implement a business plan

Rule of Thumb: 10% of customers can lead to

50% of sales
  
 
› Ôajor account management has dual goals:
› Ôaking sales
› Developing long term relationships with major
customers
› Larger share of customer leads to larger profit.
› But:
› Ôajor accounts often need detailed and
sophisticated treatment.
› Need more experienced, expert salespeople with
greater authority. Commission may lead to conflict.
  
 
› Assign key accounts to top sales
executives

› Create separate corporate division

› Create separate sales force

  
 
› Smaller firms don¶t have resources for
separate division or sales forces.
› They have relatively few major accounts
› Salesperson must be high enough in the
organization to make/influence decisions.
› Takes time from managerial
responsibilities.
  
 
› When few customers account for a large
percentage of sales: can coordinate
manufacturing, logistics, marketing and
sales.

› But there is often a duplication of efforts

and added sales expenses.
  
 
› Treat major account executives like:
› Regional sales managers
› District managers
› Vice presidents
(See Ex 5-7 on pg. 112)

› Advantages:
› Know customer better, can service better
› Often viewed as promotion, can assign best people

› Disadvantages:
› Duplication of effort
› Expense
  

 
› Response to more complex relationship
with customer: Stronger knowledge,
better service
› Get different expertise from multiple
organizational functions
› High costs: time and personnel
› Complicated: coordination, motivation,
compensation
 

!


 
› Teams call on corresponding
management levels at the customer¶s
office.
› VP to VP
› Engineer to Engineer
› Technician to Technician
  
 

 
› Teams from multiple organizations work
together to sell complex products or
systems.

› Capitalize on each member¶s

competencies (technical knowledge, sales
force)
 


  
 


 
› Direct and often automatic reordering
› Easier for customer
› Creates structurally tied relationship
› Frees sales force up to sell to new
customers, or new products to existing
customers.
 d





› Same basic issues:
› Own sales force vs. agent
› If own people, what structure?

› Decision factors more complicated due to

distance, customs, legal/political
considerations.
 D




› Should Sales be integrated within the
Ôarketing Department as it seems to be
in over ¾ of companies responding to
survey?
› Should it be a separate unit as it is in
about 20% of the responding companies?
 D




› Number of Ôanagement Levels vs. Span
of Control
› How many levels to have?
› How many people should each manager
supervise?
› Fewer levels
› Facilitates communication
› Lowers administrative costs
› Lowers quality: less effectiveness and
productivity
 D




› Reduce span of control if:
› Sales task is complex
› Profit impact of each salesperson¶s
performance is high
› Salespeople are well paid and professional
 D




› Where should authority reside?
› Hiring, Firing, Evaluation
› Selling and Ôanagerial Responsibilities?
› Ôost spend about 1/3 of time on selling
› They want commission rewards
› usually needed on key accounts, especially for their
sales ability
› Should Sales Ôanager control sales-related
activities?
› Installation, maintenance, order processing,
delivery
› usually not credit: conflict and awkward
 D




› Technology may change sales
management issues as much as it has
sales person issues. Cell phones,
computers, etc.
› Staff Support vs. Outsourcing
› Specialized knowledge
› Ôost common: recruiting, training, sales
analysis (Research?)