Lecture Dalrymple''s sales management: Concepts and cases – Chapter 2: Strategy and sales program planning

Part I

THE BIG PICTURE
Chapter 2:

Strategy and Sales Program 
Planning


LEVEL 1
Top
Management
Decisions

LEVEL 2
Strategy
Implementation
Decisions

LEVEL 3
Sales Force
Program
Decisions

Business
Business
Strategy
Strategy

Marketing
Marketing

Strategy
Strategy

Go­to­Market
Strategy
Supply Chain 
Management (SCM)

Customer
Relationship
Management (CRM)

Product Development
Management
 (PDM)

Str
cess
o
r
uct
 P e s
s
e
ure
l
Sa tiviti
Account Relationship
Ac

Com
pet
en

Strategy

cies

Figure 2­1  The Sales Force Decision Sequence

Lea

sh
de r

ip


Environmental constraints
Environmental constraints
   Legal & regulatory
   Legal & regulatory
   Demographics
   Demographics
   Economic Conditions
   Economic Conditions
   Technology
   Technology
   Competitive conditions
   Competitive conditions

   Sociocultural factors
   Sociocultural factors
Distinct competencies
Distinct competencies
   Marketing
   Marketing
   Financial
   Financial
   Technology
   Technology
   Information
   Information

Strategic Management
Strategic Management
Planning
Planning

Resources
Resources
   Financial
   Financial
   R&D
   R&D
   Personnel
   Personnel
   Brand Equity
   Brand Equity
   Production
   Production

Firm’s history
Firm’s history
management culture
management culture

Figure 2­2:  Factors Influencing Strategic Management


Corporate goals
Corporate goals
Increase shareholder wealth by 10%
Increase shareholder wealth by 10%
Business unit objectives
Business unit objectives
12% revenue growth
12% revenue growth
Grow pre­tax profits by 18%
Grow pre­tax profits by 18%
Marketing objectives
Marketing objectives
Increase product A’s market share by 2 points
Increase product A’s market share by 2 points
Grow contributions after sales & marketing by 20%
Grow contributions after sales & marketing by 20%
Sales department objectives
Sales department objectives
Achieve sales revenue of $210 million
Achieve sales revenue of $210 million
Grow contributions after sales expenses by 25%

Grow contributions after sales expenses by 25%
Sales district objective
Sales district objective
Achieve sales revenue of $10.5 million in product A
Achieve sales revenue of $10.5 million in product A
Obtain $7 million contributions after direct selling
Obtain $7 million contributions after direct selling
Salesperson objective
Salesperson objective
Achieve sales revenues of $1.2 million in product A
Achieve sales revenues of $1.2 million in product A
Obtain $0.8 million in gross margin dollars
Obtain $0.8 million in gross margin dollars
Major account objective
Major account objective
Achieve sales revenues of $95,000 in product A
Achieve sales revenues of $95,000 in product A
Obtain an average gross margin of 80%
Obtain an average gross margin of 80%

Figure 2­3:  Hierarchy of Sales Objectives


 

Low  Cost Strategy: 

High Profit Sales Programs: 

 

Vigorous pursuit of cost reductions from 
experience and tight cost control.  
 
 
 
 
 
 

 

 

Differentiation strategy: 
 

Creating an offering perceived as being 
unique leading to high brand loyalty and 
low price sensitivity. 

Niche Strategy: 
 

Servicing a target market very well, 
focusing all decisions with the target 
market needs in mind, dominating sales 
with the segment. 

 

Extensive use of independent sales agents 
Focused on transactional customer 
relationships 
Structured so that managers supervised a 
large number of salespeople 
Compensation was largely incentive based 
Salespeople were evaluated primarily on their 
sales outcome performance 

High Profit Sales Programs: 
 

 

Selective use of independent sales agents 
Focused on long­term customer relationships 
Structured so that managers intensely 
supervised a limited number of salespeople 
Compensation was largely salary based 
Salespeople were evaluated on their behaviors 
as well as their outcomes. 

High Profit Sales Programs: 
 

Experts in the operations and opportunities 
associated with a target market.  Otherwise the 
firm adopted the program characteristics 
associated with the appropriate value creation 

strategy above. 
 

 

Figure 2­ 4:  Business Strategies and High Profit Sales Force Programs 


Steps in Developing a Go-to-Market Strategy
1. What is the best way to segment the market?
2. What are the essential activities required by 
each segment?
3. What group of go­to­market participants 
should perform the essential activities?
4. Which face­to­face selling participants should 
be used?

Figure 2­5:


Figure 2­6  Essential Activities
Interest Creation

Post­Purchase

Pre­Purchase

Purchase

Figure 2­7  Potential Go­to­Market Participants

Customers and Prospects
Customers and Prospects
Agents
Agents
Direct Sales
Direct Sales Distributors Integrators
Distributors Integrators
Force
Force
Retailers
Retailers
Direct

Alliances
Alliances

Advertising
Advertising
Tele­
Tele­
Promotion
Promotion marketing
marketing
Direct Mail
Direct Mail

Internet
Internet

Indirect
Sales Force Options

Non­Sales Force Options

Company
Company


Figure 2­8  Comparing Various Go­to­Market Alternatives

Low Cost
per Exposure

Advertising
Direct Mail
Internet

Efficiency

Telemarketing

Sales Force

Effectiveness

High Sales
per Exposure

Figure 2­9  Product Development Management 
Subprocesses

Identify customer needs for better solutions
Discovering and designing new product solutions
Developing new solution prototypes
Managing internal departmental priorities and involvement
Designing activities to speed­up development process
Launching new and redesigned offerings


Figure 2­10  Supply Chain Management Subprocesses
Selecting and managing supplier relationships
Managing inbound logistics
Managing internal logistics
Managing outbound logistics
Designing product assembly and batch manufacturing
Managing process technology
Order, pricing, and terms management
Managing channel partners
Managing product installation and maintenance


Figure 2­11  Customer Relationship Management 
Subprocesses
Identifying high value prospects
Learning about product usage and application
Developing and executing advertising and promotion programs
Developing and executing sales programs

Developing and executing customer service programs
Acquiring and leveraging customer contact information systems
Managing customer contact teams
Enhancing trust and customer loyalty
Cross­selling and upselling of offerings


Figure 2­12 Sales Force Program
Marketing Objectives, Strategy, and
Marketing Objectives, Strategy, and
Strategy Implementation Program
Strategy Implementation Program
Estimates of sales
Estimates of sales
potential and 
potential and 
sales forecast
sales forecast

Account Relationship Strategy
Account Relationship Strategy

Desired Selling Actions
Desired Selling Actions
and Behaviors
and Behaviors
Estimates of sales force
Estimates of sales force
size and budget
size and budget

Organizational Structure
Organizational Structure

Competency Development Program
Competency Development Program

Leadership System
Leadership System
Feedback


ise ip
r
rp s h
e
t
n
En atio
l
Re

Investment
by
Supplier
al
n
o
cti ship
a

s on
n
a
i
Tr elat
R

ve
i
t
lta ship
u
ns tion
o
C ela
R

Investment by Customer

Figure 2­13: Alternative Types of Account Relationships


Good
27%
Very 
Good
10%

Fair
10%

Poor
53%

Figure 2­14: Partnering Effectiveness Index