chapter 03


PART II

PLANNING THE SALES TEAM’S EFFORTS


CHAPTER 3

BUILDING RELATIONSHIPS

THROUGH STRATEGIC

PLANNING


The importance of corporate strategy.

How strategic planning differs from tactical operational planning.

The relationship between marketing and sales force strategies.

The role of personal selling in the firm’s marketing relationship efforts.

LEARNING OBJECTIVES

Strategic planning helps an organization build long-term relationships with its customers. This chapter will help you better understand:


IMPORTANCE OF CORPORATE

PLANNING

• Strategic planning involves making decisions about the organization’s long-

term goals and strategies.

• Strategic goals are major targets or end results that relate to the long-term

survival, value, and growth of the organization.

STRATEGIC PLANNING


• Strategy is a pattern of actions and resource allocations designed to achieve the goals

of the organization.

STRATEGIC PLANNING Continued


• Tactical planning translates broad strategic goals and plans into specific goals and

plans relevant to a definite portion of the organization.

• Tactic is the operational means by which an organization intends to reach its

objective.

• Operational planning identifies the specific procedures and processes required at

lower levels of the organization.

TACTICAL AND OPERATIONAL PLANNING


• Mission is the basic purpose and values of the organization, as well as its scope

of operations.

• Strategic vision provides a perspective on where the company is headed and

what the organization can become.

• Strategic plan is the company’s mission, values, objectives, strategies and tactics.

ESTABLISHING A MISSION AND VISION


1. Where are we?

2. Where do we want to be?

3. How should we get there?

4. Can we afford it?

Four key questions:


VISION“Our heritage has been and our future is to be

the World Leader in Imaging.”

MISSION“Build a world-class, results-oriented culture…

by providing…solutions to capture, store, process, output,and communicate…images to people and machines

anywhere, anytime...bringing differentiated, cost-effectivesolutions…to the marketplace and with

flawless quality…through a diverse team of energeticemployees with the world-class talent and skills

necessary to sustain Kodak as the World Leader in Imaging.In this way, we will achieve our

fundamental objective of Total Customer Satisfaction,and our consequent goals of Increased Global

Market Share and Superior Financial Performance.”

VALUES(1) Respect for the Dignity of the Individual

(2) Integrity (3) Trust (4) Credibility(5) Continuous Improvement and Personal Renewal

Source: Kodak’s 1999 annual report.

FIGURE 3.1 KODAK’S VISION, MISSION, AND VALUES


FIGURE 3.2 RELATIONSHIP BETWEEN THE ORGANIZATION’S STRATEGIC PLAN AND OPERATIONAL PLANS

O rgan iz atio n ’s Strategic P lan

M issio n O b jectiv es Strategies P o rtfo lio p lan

O p eratio n al P lan s

O b jectiv es Fo recast B ud gets Strategies an d

P o licies

O b jectiv es Fo recast B ud gets Strategies an d

P o licies

O b jectiv es Fo recast B ud gets Strategies an d p ro gram s P o licies

O b jectiv es Fo recast B ud gets Strategies an d p ro gram s P o licies

H um an R eso urces P lan

F in an cial P lanM arketin g P lanP ro d u ctio n P lan


WHAT IS MARKETING?

• Production of goods or creation of services.

• Marketing those goods and services.

Businesses have two major functions:


Marketing is defined as the process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges that satisfy individual and organizational objectives.


M arketin g P rodu ction H u m an R esou rces

Top Management

Functional Departments

Salespeople

Customers Manufacturers – Service – Wholesalers – Retailers – Consumers

FIGURE 3.3 THE MARKETING GROUP – THE LINK BETWEEN CUSTOMERS AND THE ORGANIZATION


Marketing people typically have these four basic objectives to accomplish:

1. Maximize sales of existing products in existing markets.

2. Develop and sell new products.

3. Develop new markets for existing or new products.

4. Provide the quality of service necessary for customers to be satisfied with their transactions and to continue doing business with the organization.


MARKETING’S IMPORTANCE

TO THE FIRM

• Marketing generates sales.

• Marketing provides quality service.


ESSENTIALS OF A FIRM’S

MARKETING EFFORT

The essentials of a firm’s marketing effort include its abilities (1) to determine the needs of its customers and (2) to create and maintain an effective marketing mix that satisfies customer needs.


• Product• Price• Distribution or place• Promotion.

Marketing mix consists of four main elements:


• A good is a physical object that can be purchased.

• Service is an action or activity done for others for a fee.

• Product refers to both goods and services.

PRODUCT: IT’S MORE THAN YOU MIGHT THINK


M a rk etin g M ix

FIGURE 3.4 FOUR MARKETING-MIX ELEMENTS AND FOUR PROMOTION ACTIVITIES

Product Price Place Promotion

P erson a l S el lin g A d vertisin g S a les P rom otion P u blici ty


FIGURE 3.5 A GOOD/SERVICE CONTINUUM

R elativ ely P ure

G o o d s Salt Sou p

R elativ ely P ure

Serv ices B aby- sitt in g I n suran ce Teach in g

Serv ice- I n ten sive

G o o d s A utom obiles

G o o d s- I n ten sive Serv ices

A ir travel

H yb rid s R estau ran ts


SERVICES ARE PRODUCTS

They present their own selling challenges and opportunities:

• Intangibility – customers cannot sample.

• Inseparability – cannot be separated from the seller.

• Heterogeneity – cannot standardize output.

• Perishability and fluctuating demand – highly perishable, seasonal fluctuations.

• A tough sell – most challenging sales job.


M a rk etin g M ix





PRICE: IT’S IMPORTANT TO SUCCESS

• Price refers to the value or worth of a product that attracts the buyer to exchange money or something of value for it.


M a rk etin g M ix





DISTRIBUTION: IT HAS TO BE AVAILABLE

• Distribution (or place) refers to the channel structure used to transfer products from an organization to its customers.


• Household – decision-making unit buying for personal use.

• Firm – an organization that produces goods and services.

• Government – an organization that has two functions: the provision of goods

and services to households and firms and the redistribution of income and wealth.

There are three groups of customers:


M a rk etin g M ix





PROMOTION: PEOPLE HAVE TO BE TOLD

• Promotion, as part of the marketing mix, increases company sales by communicating product information to potential customers.


Four basic parts of a promotional effort:

1. Personal Selling

2. Advertising

3. Publicity

4. Sales Promotion


TABLE 3.1 PROMOTIONAL ACTIVITIES

• Advertising. Nonpersonal communication of information paid for by an identi- fied sponsor such as an individual or an organization. Modes of advertising in-clude television, radio, direct mail, catalogs, newspapers, and outdoor advertis-ing such as billboards.

• Publicity. Nonpersonal communication of information that is not paid for by an individual or organization. Information appears in media such as television, radio, and newspaper.

• Sales promotion. Involves activities or materials used to create sales for goods or services. The two types of sales promotion are consumer and trade sales promotion. Consumer sales promotion includes free samples, coupons, con-tests, and demonstrations to consumers. Trade sales promotion encourages wholesalers and retailers to purchase and to sell aggressively using devices such as sales contests, displays, special purchase prices, and free merchandise.

• Personal selling. Personal communication of information to persuade a prospective customer to buy something – a good, service, idea, or whatever

– that satisfies an individual’s needs.


Man

ufac

ture

r

C o n sum er P ro d u cts

H ouseh old C on sum er

R etailer

W h olesaler

H ouseh old C on su m er

R etailer H ouseh old C on sum er

I n d ustrial P ro d ucts

Man

ufac

ture

r

I n dustrial U ser

W h olesaler I n dustr ial U ser

FIGURE 3.6 TYPICAL DISTRIBUTION CHANNELS FOR CONSUMER AND INDUSTRIAL PRODUCTS


PRODUCT PRICE PLACE PROMOTION

Brand name Credit term Channels Advertising

Features Discounts Inventory Coupons

Image List price Locations Free samples

Packaging Promotional allowances Retailers Personal selling

Quality level Transportation Product displays

Returns Wholesalers Publicity

Services Sales management

Sizes Trade shows

Warranties

TABLE 3.2 EXAMPLES OF EACH MARKETING-MIX ELEMENT


THE GOAL OF A MARKETING MIX

The organization’s marketing group strives to create a marketing mix for the right product, at the right price, at the right time, and with the right promotional effort.


RELATIONSHIP MARKETING

Relationship marketing is the creation of customer loyalty.


• Transaction selling: Customers are sold to and not contacted again.

• Relationship selling: The seller contacts customers after the purchase to determine if

they are satisfied and have future needs.

• Partnering: The seller works continually to improve its customers’ operations, sales,

and profits.

LEVELS OF RELATIONSHIP MARKETING


TECHNOLOGY BUILDS

RELATIONSHIPS AND PARTNERS

• Most dramatic force shaping an organization’s marketing efforts today.

• Helps salespeople increase the speed with which they can find leads, gather information, reduce paperwork, and provide service.

• Technology is expensive.


RELATIONSHIP MARKETING

AND THE SALES FORCEThese four basic questions are guidelines that define the role of the sales force:

1. How much selling effort is necessary to gain and hold customers?

2. Is the sales force the best marketing tool, compared to advertising and other sales promotion methods, in

terms of cost and results?

3. What type of sales activities – for example, technical assistance and frequent or infrequent sales calls – will be necessary?

4. Can the firm gain strength relative to its competition with its sales force?


• Salespeople generate revenue.

• Salespeople provide service.

Service quality is a subjective assessment that customers arrive at by evaluating the service level that they perceive being delivered.

• Salespeople implement relationship marketing.

PERSONAL SELLING BUILDS RELATIONSHIPS


STRATEGIC PLANNING AND THE SALES MANAGEMENT PROCESS

PLANNING A SALES STRATEGY

THE DEVELOPMENT OF SALES STRATEGIES

1. A clear picture of the present situation.

2. Well-defined strategies covering every major aspect of the selling units or departments.

3. Income and expense budgets and profit plan.


A sales strategic plan includes the following four major questions:

1. What is the sales department’s present condition?

2. What trends are apparent?

3. What are the most important objectives?

4. What are the strategies for getting these objectives accomplished?


SETTING NEXT YEAR’S SALES PLAN

The sales force may have objectives measured on the basis of the following:

• Contribution to profits.

• Return on assets (ROA) managed by the sales force.

• Sales/cost ratio.

• Market share.


SALES OBJECTIVES DIRECT OTHER ACTIVITIES


FIGURE 3.8 THE STRATEGIC SALES FORCE PLANNING PROCESS

S a les F orce O bjecti ves

D efi n e R oles, A cti vi ties, a n d M a rk ets of S a les F orce

E sta blish O r ga n iz a tion a l D esign a n d S tru ctu re

S ta ff in g T ra in in g D irectin g

S a les A n a lysis a n d E va lu a tion of S a les P erson n el


THE BOTTOM LINE

Strategic planning involves making decisions about an organization’s long-term goals and strategies.

Most people today associate marketing with selling.

This marketing concept evolved over the years, developing as American businesses matured.

The marketing mix consists of four variables: product, price, distribution, and promotion.

Firms must carefully consider the role of the sales force in their promotional program or promotional aspect of the marketing mix.

chapter 03

Documents

strategic planning copyright

tactical operational

process of planning

marketing people

programs policies copyright

strategic vision

firm marketing

broad strategic goals