Sales Force, Internet & DM

StrategiesSTRATEGIC MARKETING & PLANNING

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Companies may use a combination of sales people, direct marketing and the Internet to make customer contacts.

The growth of Internet is affecting the traditional role of salespeople…

The underlying logic of direct marketing is making direct contact with end-user customers through alternative media.

Making customer contact

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Personal Selling at Boeing Co.

During the 2000s, Boeing experienced an intense competitive battle against Airbus, for control of the commercial jetliner market. Airbus was winning the battle until 2005.

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The Role of Selling at Boeing Co.

Boeing had lost many sales to Airbus because of top management’s unwillingness to give competent professionals flexibility in negotiating sales.

Under a new CEO, James McNerney, Boeing management gave salespeople more control over selling strategy compared to rigid control maintained by the previous top management.

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The Role of Selling at Boeing Co.

Salespeople like Larry Dickenson, Boeing’s top salesman who covers the Asia-Pacific market, had relationships with airlines like Cathay Pacific, Qantas Airways Ltd., and Singapore Airlines, Ltd., over 18 years, and had negotiated winning contracts.

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The Role of Selling at Boeing Co.

His strategy is a combination of attractive pricing, financing, and leasing arrangements in combinations with training and service packages.

Boeing won many contracts in the two years that Larry remained head of Sales- but Boeing was embroiled in other problems that gave Airbus the edge.

Developing the Sales Force

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The Role of Personal Selling

Salespeople’s responsibilities may range from being simple order-takers to being seen as consultants to customers.

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Personal Selling

Factors influencing the role of personal selling in an organization:1. Marketing objectives & strategy2. Target Market3. Product/ service characteristics4. Distribution policies5. Pricing policies6. Communication tasks to be

accomplished.

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Categories of Personal Selling

1. Transactional selling: price based, used mainly for commodities;

2. Feature/benefit selling: commonly used for consumer products;

3. Solution selling: matching clients’ needs, designing special solutions;

4. Value-added selling: originally used in consulting type relationships, with high compensation, now expanding in scope.

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The Selling Process

A typical selling process comprises:

1. Prospecting for customers;2. Opening the relationship;3. Qualifying the prospect;4. Presenting the sales message;5. Closing the sale;6. Servicing the account.

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Selling In Difficult Times: i2 i2 Technologies Inc. provides software & consulting services to corporate clients for supply chain, product life cycle, & customers relationship management.

Sales had grown from $ 362 million in 1998 to $ 800 million + in 2001. But, sales in 2002 partly due to the global economic slowdown.

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Selling In Difficult Times: i2 The i2 selling had concentrated on forming long-term relationships with corporate clients -expensive software applications made that necessary.

Big-ticket clients included Caterpillar, Dell Computer, General Electric, and most were displaying a major slowdown.

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i2 thinks small is beautiful Management responded by altering i2’s selling process.

The new strategy called for driving growth by concentrating on less expensive and more focused projects.

Sales would also require shorten time span for skills development, compared to six months required for big projects.

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i2 thinks small is beautiful This change in focus involves a

major change in the selling approach.

The new strategy reflected the realities of a weak economy - but shifted corporate customers’ attention towards more focused projects.

The strategy shift has moved i2 into a different competitive environment and one that has brought the company success!

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Selecting the Right Sales Channel

1. Customer Buying Power: Differences in customers result from differences in: Size/ volume of purchase; Frequency of purchase Delivery locations.

2. Complexity of customer relationship: complex customers require greater use of customer management strategies &/ or customer databases.

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Selecting the Right Sales Channel

3. Customer threshold levels: customers buying power influences selection of selling channels.

B2B or B2C… Value of multiple selling channels

strategy should be carefully determined based on time & effort needed for servicing.

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Designing the sales organization

TWO COMPONENTS OF DESIGN:

1. Organizational structure: One that supports the firm’s sales force strategy.

Important influences on organizational design:

1. Type of customer base;

2. Product type; &

3. Geographic location of buyers.

Designing the sales organizationMatching customer needs &

product offeringCustomer needs different

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Customer needs similar

Simpleproductoffering

Complex

productoffering

Market driven

design

Geography-driven design

Product/Market

driven design

Product driven

design

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Designing the sales organization TWO COMPONENTS OF

DESIGN: 2. Sales force size &

deployment: Factors to be kept in mind:a) Market potential;b) Number & location of

customers;c) Intensity of competition &d) Market standing of company.

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Recruiting & Training Sales force selection: General considerations:

1. Being committed & customer-driven;

2. Accepting direction, cooperating with team;

3. Being motivated by one’s peers.

Sales force training: Formal or informal; On the job or otherwise.

Supervising & motivating sales force;

Performance evaluation.

Selling on the Internet

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Strategy Development

Determining objectives first: 1. Disseminating information2. Creating Awareness3. Brand building4. Encouraging trial5. Improving customer service6. Expanding distribution.

Selling on the Internet E-Commerce Strategy: enabling

buyers to purchase products in a convenient & efficient manner offering a compelling set of benefits, & metrics to evaluate impact.

Value Opportunities and Risks

Properly designed web-based initiatives create new opportunities for growth;

Risk is high because of sudden changes in audience characteristics or access & response delays, or potential for deception etc.

Measuring Internet Effectiveness

Ad impressions, clicks, unique visitors, total visits, page impressions & more.

Nielsen Ad Effectiveness criteria: Brand familiarity Brand consideration Purchase propensity Creative execution effectiveness Placement impact Frequency of exposure influence.

E-Tailing Finally Hits Its Stride

THE BIG GUNS ARRIVEAfter early struggles, online sales at brick-and-mortar giants such as Wal-Mart, Sears, and Gap are soaring. These chains are also using the Web to test new products and move into new markets.

NICHES GO NATIONALMore and more niche players are succeeding by offering variety rivals can’t match. Luggage seller eBags, for example, is able to stock 12,000 styles, compared with 250 in a typical store.

E-Tailing Finally Hits Its Stride

SEARCH LENDS A HANDUsing Google and similar Websites, consumers can search far and wide for specialized products – say, stainless-steel farm sinks. That’s creating markets for lesser known brands and new merchants.

MORE PRICING PRESSURESShoppers are increasingly using price-comparison sites such as Shopping.com and Shopzilla. The result: Ever more cutthroat competition for brick-and-mortar and online stores alike.

In keeping with Socio-economic Trends

Time constraints/convenience Low Access Costs

Much lower than face-to-face contact

Data Base Management Facilitates direct marketing

initiatives Value

Provides an attractive bundle of value.

Using Direct Marketing