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15 RETAIL MARKETING WHAT IS A RETAILER? • STORE-BASED RETAILERS – Convenience stores – Specialty stores – Department stores – Supermarkets – Category killers – Supercenters Allsup’s Dillard's Kroger Wal-Mart WHAT IS A RETAILER? • NONSTORE-BASED RETAILERS – – Telephone sales – – Vending machines – Direct selling – – LO2 CLASSIFYING RETAIL OUTLETS LEVEL OF SERVICE Self-Service Limited Service Full-Service 17-4 RETAIL CLASSIFICATION BY PRODUCT LINE Specialty Stores Bath & Body Department Stores J.C. Penny Supermarkets Kroger Convenience Stores 7-Eleven Superstores Wal-Mart (120,000+) Automated Vending ARAMARK Category Killers Container Store Narrow Product Line, Deep Assortment i.e. Wide Variety of Product Lines i.e. Clothing, Home Furnishings, & Household Items Wide Variety of Food, Laundry, & Household Products Limited Line of High-Turnover Convenience Goods Large Assortment of Routinely Purchased Food & Nonfood Products, Plus Services Specialty Operators Particular Category (airports) Giant Specialty Store that Carries a Very Deep Assortment of a Particular Category LO2 CLASSIFYING RETAIL OUTLETS TYPE OF MERCHANDISE LINE Depth of Product Line • Specialty Outlets • Category Killers 17-6 LO2 CLASSIFYING RETAIL OUTLETS TYPE OF MERCHANDISE LINE Breadth of Product Line • General Merchandise Stores • Scrambled Merchandising •Several unrelated lines in a single store. 17-7 CLASSIFICATION BY TYPE OF ORGANIZATION Merchandising Conglomerates Corporate Chains Gap Franchise Organizations Voluntary Chains IGA Retailer Cooperatives LO3 NONSTORE RETAILING Automatic Vending Direct Mail and Catalogs 17-9 LO4 RETAILING STRATEGY POSITIONING A RETAIL STORE Retail Positioning Matrix • Breadth of Product Line • Value Added 17-10 LO4 RETAILING STRATEGY RETAILING MIX Retailing Mix the activities related to managing the store and the merchandise in the store, which includes retail pricing, store location, retail communication, and merchandise. 17-11 LO4 RETAILING STRATEGY RETAILING MIX – PRICE TERMINOLOGY MARGIN MARK-UP ( (SP-C) / SP) *100 ( (SP-C) / C )*100 MARK-DOWN ( I SPO-SPN I / SPO) *100 INVENTORY TURNOVER Average number of times a year a retailer Expects to sell its inventory 17-12 LO4 RETAILING STRATEGY RETAILING MIX Off-Price Retailing selling brand-name merchandise at lower than regular prices. • Warehouse Club • Outlet Store Overruns, Irregulars, Discontinued Excess Inventory, Refurbished • Single/One-Price Policy Store / Discount Stores 17-13 LO4 RETAILING STRATEGY RETAILING MIX – STORE LOCATION Shopping Centers Freestanding Retailers 17-14 SITE SELECTION FACTORS Site Evaluation Population Characteristics •Traffic flow, parking, visibility from the street, ease of delivery access, zoning, amount of taxes, etc. •Age profile, community life cycle, and mobility of population. Competition •May locate in a saturated trade area or an understored trade area. Targeted Customers •Match store type to target customer needs and community environment. TYPES OF SHOPPING CENTERS NEIGHBORHOOD COMMUNITY REGIONAL Supermarket and a few other stores Department store and specialized stores Multiple department stores Heavily convenience goods Some convenience but mostly shopping goods ~150,000+ sq. ft. 100+ other stores ~50,000+ sq. ft. ~400,000+ sq. ft. ATMOSPHERICS [AMBIANCE] Store Layout / Signage Arrangement of Merchandise in the Store; Grid Layout or Free-Flow Layout Fixture Type & Merchandise Density Shelves & Racks That Display Merchandise; How Much “Stuff” is in the Sales Area Sound / Music / Odor Color and Lighting Use Both to Set a Mood Within a Store Employee Attitude LO4 RETAILING STRATEGY RETAILING MIX Merchandise • Category Management •an approach to managing the assortment of merchandise in which a manager is assigned the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other, with the objective of maximizing sales and profits in the category. • Metrics 17-18 RETAILER BRAND OPTIONS Retailers Have Several Options When Deciding What Brands to Sell National Brands Manufacturers’ Brands Coca-Cola Brands That Are Owned & Sold by a Retailer Sam’s Cola END OF LECTURE LO5 FUTURE CHANGES IN RETAILING Retail Life Cycle Multichannel Retailers utilize and integrate a combination of traditional store formats and non-store formats such as catalogs, television, and online retailing. 17-20 16 SERVICES MARKETING SERVICES MARKETING • SIMILAR TO PRODUCT MARKETING • WITH SIGNIFICANT DIFFERENCES GOODS – SERVICES COMPARISON GOODS SERVICES IMPLICATIONS FOR A PURE SERVICE Tangible Intangible Cannot be physical - or inventoried - or displayed Standardized Heterogeneous [Inconsistent] Difficult to compare Quality depends on uncontrollable factors Personalization ? [Amazon, Dell] - expectations / perceptions - reputation Production is separate from consumption Simultaneous AND Inseparable Short channels of distribution Nonperishable Perishable [Limited Inventory] Cannot be - stored, resold, or returned - are subject to spoilage SERVICES Experienced Services Experienced Benefits Expected Services Expected Benefits Perceived Services Perceived Benefits CHALLENGE: Maximize customer experience and value! SERVICES MARKETING OF • PLACES • IDEAS • PEOPLE DIFFERENTIATING SERVICES • OFFER – Constructed and presented • • • • DELIVERY IMAGE INNOVATION VALUE – HOW? – LOCATION? LO3 CONSUMERS AND SERVICES The Purchase Process SEARCH Attributes that the Customer Can Examine Prior to Purchase. Examples: Color, Style, Fit, & Smell EXPERIENCE Product Characteristics that Customers Can Determine During or After Consumption. Example: Vacations CREDENCE Attributes that We Find Difficult to Evaluate Even After We’ve Experienced Them. Example: Doctor’s Diagnosis LO2 THE UNIQENESS OF SERVICES SERVICES – GOODS CONTINUUM Pure Good Groceries TANGIBLE Goods w/ Service Hybrid Autos Restaurants CHARACTERISTICS Service w/ Goods Rental Movies Pure Service Medical Care INTANGIBLE ACHIEVING SERVICE EXCELLENCE • A STRATEGIC CONCEPT • AN ORGANIZATIONAL COMMITMENT [CEO level] • HIGH STANDARDS • MONITOR AND IMPROVE QUALITY • SATISFY PUBLICS – CUSTOMERS, EMPLOYEES, SUPPLIERS • MANAGE / MEASURE PRODUCTIVITY LO3 ASSESSING SERVICE QUALITY • DETERMINING METRICS – WHAT ARE THE RELEVANT MEASURES? – HOW DO WE COLLECT THE DATA? • CRITICAL-INCIDENT TECHNIQUE • IMPORTANCE-PERFORMANCE ANALYSIS 5 DIMENSIONS OF SERVICE QUALITY • RELIABILITY – Delivering as promised • RESPONSIVENESS – Providing assistance in a timely manner • ASSURANCE – Quality of employees and their ability to exude confidence and trust • EMPATHY – Caring, individualized attention • TANGIBLES – Appearance of facilities, personnel, and IMC materials IMPORTANCE-PERFORMANCE ANALYSIS Extremely important B. Keep up the good work C. Low priority D. Possible overkill Fair performance Excellent performance A. Concentrate here Slightly important INTERNAL SERVICE MARKETING Everyone is a customer! Compete for Talent Offer a Vision Empowerment Train Employees Reward Performance Internal Marketing Activities Stress Teamwork Know Employees’ Needs 17A INTEGRATED MARKETING COMMUNICATIONS [IMC]: OVERVIEW INTEGRATED MARKETING COMMUNICATIONS (IMC) The concept under which the company has careful integration and coordination of all communication channels to deliver a clear, consistent, and compelling message[s] about the organization and / or its products to all its publics. SOME IMC COMMUNICATION VEHICLES ADVERTISING CONSUMER PROMOTIONS POINT OF PURCHASE COLLATERAL EVENTS PUBLIC RELATIONS PACKAGING & LABELING DIRECT MARKETING SALES AIDS INTERNET TRADE SHOWS TRADE PROMOTIONS LO1 THE COMMUNICATION PROCESS Promotional Mix • Inform Prospective Buyers • Persuade Them To Try • Remind Them of the Benefits 18-37 AD PERCEPTION • Selective exposure – Sees or hears it • Doesn’t see or hear • Selective attention – Pays attention • Selective comprehension – Understands • Didn’t pay attention • Misunderstood • Selective retention – Remembers • Doesn’t remember LO3 IMC—DEVELOPING THE PROMOTIONAL MIX CHANNEL STRATEGIES: PUSH STRATEGY Through channels to consumers Manufacturer Reseller(s) Advertising & promotion Consumers LO3 IMC—DEVELOPING THE PROMOTIONAL MIX CHANNEL STRATEGIES To consumers and back through channels Manufacturer Reseller(s) Advertising & promotion Consumers LO4 DEVELOPING AN IMC PROGRAM Identifying the Target Audiences Specifying Communication Objectives • Hierarchy of Effects [2 models] Awareness – Interest – Trial – Adoption Evaluation Attention – Interest – Desire – Action [AIDA] LO4 DEVELOPING AN IMC PROGRAM SETTING THE PROMOTION BUDGET AFFORDABLE METHOD PERCENT-OFSALES METHOD How much can we afford? Revenue basis COMPETITIVEPARITY METHOD OBJECTIVE-&TASK METHOD Meet / match competition Planned & measured SETTING THE PROMOTION MIX ADVERTISING Any paid form of non-personal advertising by a paid sponsor PROMOTION Short-term incentives to stimulate sales PUBLIC RELATIONS Relating to various publics by utilizing favorable messages DIRECT MARKETING ------------------------------PERSONAL SELLING [SALES] SETTING THE PROMOTION MIX ADVERTISING PUBLIC RELATIONS -Extensive reach -Expressive -Impersonal -Believable -Effective -Economical PROMOTION DIRECT MARKETING ------------------------------SALES -Incentives to buy -Short-lived -Collateral -Support MESSAGE EXECUTION STYLES (Advertising appeals) USP Dominos Testimonial Evidence B2B execs Slice of Life Coca-Cola Scientific Evidence Scientists Lifestyle Pepsi Technical Expertise Engineers Fantasy Disney Personality Symbol CEOs Mood or Image [Humor, sex, fear] Musical [Song or theme] [Coca-Cola, Disney, McDonalds,…] DEVELOPING EFFECTIVE COMMUNICATIONS Identify target audience Set communication objectives Designing the message Choosing the media and source Personal or impersonal; SRDS; competitive reporting Agency or other mix 17B INTEGRATED MARKETING COMMUNICATIONS: ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS LO1 TYPES OF ADVERTISEMENTS An objective for every target market Informative Advertising Persuasive Advertising Build Primary Demand Build Selective Demand New products Major product changes “Coldwater Tide” “Buy brand X” Stress some brand X benefits Reminder Advertising Comparison Advertising Compares Brand A to B Features & benefits Keeps Consumers Thinking About a Product Repurchase “Have you had your Wheaties today?” LO2 DEVELOPING THE AD PROGRAM Advertising Categories National (global) brand advertising Retail (local) advertising Directory advertising Business-to-business advertising Institutional advertising Direct response advertising Public service advertising Internet advertising LO2 DEVELOPING THE ADVERTISING PROGRAM SELECTING THE RIGHT MEDIA 1. Decide on Reach, Frequency, and Impact Step 2. Choosing Among Major Media Types Media Habits of Target Consumers / Segments Nature of the Product - Type of Message Cost Step 3. Selecting Specific Media Vehicles Specific Media Within a Given Type, i.e. TV’s ER. Must Balance Media Cost Against Media Factors: Audience Quality & Attention, Editorial Quality Step 4. Deciding on Media Timing Scheduling of Advertising Over the Course of a Year Pattern of Ads: Continuity or Pulsing Media Schedule LO3 EXECUTING THE ADVERTISING PROGRAM IMPLEMENTING THE ADVERTISING PROGRAM Creative Services Develops Campaign’s Strategy for Client Media Planning Determines Effective Communication Vehicles / Media Schedule Dreams Up and Produces the Ads / Materials ADVERTISING CHALLENGES TODAY Technology Empowers the Consumer: Internet Greater Emphasis on Point-of-Purchase [POP] The Rules Are Changing: Cable, Internet The Advertising Environment is Cluttered: Much more noise Some Consumers Are Turned Off by Advertising: Gen Y: social networking – friends, family, online, … ads Message Money Message generation Factors to consider: Message evaluation and selection Mission Stage in PLC Sales goals Market share and consumer base Advertising objectives Competition and clutter Advertising frequency Product substitutability Message execution Social-responsibility review Measurement Communication impact Media Reach, frequency, impact Major media types Specific media vehicles Media timing Geographical media allocation Sales impact DEVELOPING EFFECTIVE COMMUNICATIONS Target market segment profile and identify your target audience – be very specific! Set communication objectives Awareness Knowledge Liking Preference Conviction Purchase LO3 ASSESSING THE ADVERTISING PROGRAM POSTTESTING THE ADVERTISING Posttests – How well did the ad perform? Aided Recall Noted – Seen - Read Unaided Recall Attitude - Inquiry - Sales tests 19-55 CONSUMER PROMOTION Consumer-Promotion Objectives Consumer-Promotion Tools Advertising Specialties Increase Short-Term Sales Build Long-Term Market Share Get Retailers to Carry New Items Sales Force Support for Current or New Products Consumer Relationship Building Cash Refunds Patronage Awards Price Packs Premiums Point-of-Purchase Displays CONSUMER PROMOTION Create Awareness Slogans & Jingles Make the consumer aware there is a new product on the market. Inform the Market Internet / Advertising Provide knowledge about the benefits the product offers. Create Desire Status Appeals Create favorable feelings toward the product and interest. Encourage Trial Encourage trial & use of product among target users. Build Loyalty Convince customers to keep purchasing product. Coupons / Samples / Promotions Product Placement / Repurchase Programs LO4 SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION Loyalty Programs Rebates Product Placement Introduce / Demonstrate new products 19-58 LO4 SALES PROMOTION TRADE-ORIENTED SALES PROMOTION Trade-Promotion Objectives Trade-Promotion Tools Persuade Resellers to Carry a Brand Price-Offs Premiums Obtain Brand Shelf Space Allowances Displays Promote a Brand with Advertising Buy-Back Guarantees Discounts “PUSH” a Brand Free Goods Specialty Advertising Items TRADE PROMOTION Industrial Customers Trade-Promotion Objectives Generate Business Leads Stimulate Purchases Trade-Promotion Tools Advertising Allowances * Initial Stock Buy-Back * Displays Sales Contests * Discounts or Free Goods Reward Customers Motivate Manufacturer or Reseller Salespeople Conventions And Trade Shows * Specialty Advertising Programs DEVELOPING A SALES PROMOTION PROGRAM Decide on the Scope of the Program and the Size of the Incentive Set Conditions for and Rules of Participation Determine How to Roll-out [includes training at all levels] and Distribute the Promotion Program Determine the Length of the Program Evaluate the Program LO5 PUBLIC RELATIONS PUBLICITY TOOLS Public Relations Publicity Tools News release Public service announcement News conference Invitational event 19-62 PUBLIC RELATIONS OBJECTIVES Introducing New Products to Manufacturers Introducing New Products to Consumers Influencing Government Legislation Enhancing the Image of a City, Region, or Country Calling Attention to a Firm’s Involvement with the Community PUBLIC RELATIONS TOOLS Strong PR Firm Press releases / stories (Firm and it products) Public Affairs (Community relations) Lobbying (Specialized firms & tasks) Investor Relations (almost always a corporate function) Development & Miscellaneous BUILDING AN IMC PLAN: Coordinate and maximize the effectiveness of all the tools. ADVERTISING CONSUMER PROMOTIONS POINT OF PURCHASE TRADE PROMOTIONS COLLATERAL EVENTS PUBLIC RELATIONS PACKAGING & LABELING DIRECT MARKETING SALES AIDS INTERNET TRADE SHOWS PROMOTION MIX AND THE PLC • ANY OR ALL ELEMENTS MAY CHANGE • BY STAGE OF THE PLC – ADVERTISING – PUBLIC RELATIONS – SALES – SAMPLES IMC CHALLENGES • • • • • • FLOW TIMING ACCURACY COORDINATION CONTROL MEASUREMENT E-COMMERCE OBJECTIVES • Must address integrate with your existing business[es] with a minimum amount of conflict and disruption. • Need to define measurable goals INTEGRATING E-COMMERCE STRATEGY AND ACTIVITY • Scope • Types of transactions • Order size • … 17C INTEGRATED MARKETING COMMUNICATIONS [IMC]: DIRECT MARKETING TRENDS CAUSING GROWTH IN DIRECT MARKETING • Growth and specialization of databases allows better definition of market segments and niche marketing. – Marriott, Hilton • Lack of time drives the need for convenience. – Both parents work combined with the social schedules of the children reduce the available time to shop. BENEFITS OF DIRECT MARKETING Benefits to customers Fun, Convenient & HassleFree Benefits to companies Buy Mailing Lists for Almost Any Market Customized Offers Improved Selection Ongoing Relationships with Customers More Comparison Shopping Timed to Achieve Higher Readership & Response Order Products for Themselves or Others Direct Access to Markets Not Location Dependent Reduced Inventory ? Shopping Privacy MASS vs. 1:1 MARKETING Mass Marketing One-to-One Marketing Average Consumer Individual Customer Customer Anonymity Customer Profile Standard Product Customized Market Offering Mass Production Customized Production Mass Distribution Individualized Distribution Mass Advertising Individualized Messages Individualized Incentives Mass Promotion Two-Way Messages One-Way Message Economies of Scale Economies of Scope Share of Mind Share of Customer All Customers Profitable Customers Customer Attraction Customer Retention THE ROLE OF DIRECT MARKETING MARKETS OR INDUSTRIES RESELLER ACCOUNTS OTHER ACCOUNTS HOW DO WE COST-EFFECTIVELY REACH TARGET MARKETS OF SMALL ACCOUNTS? SEGMENTATION IS CRITICAL TO DIRECT MARKETING SUCCESS AND COSTEFFICIENCY A firm has a fish or fish related product, so it targets 44511 & 44522 [71,095 firms]. More information is needed to also target 44512, 44521, 44529, and 445299 [48,513 firms]. Approaching all 148,528 firms in 445 would have resulted in a large waste of money. You may have spent money going after up to 77,433 firms that do not have any use for the product! CONSUMER DIRECT MARKETING CONSUMER TYPES IN-HOME SALES DOOR TO DOOR PARTIES DIRECT MAIL CATALOG INTERNET FLYERS INTERNET BENEFITS* CONSUMER CONVENIENCE SPEED-TIME-PLACE COMPREHENSIVE PRODUCT SELECTION AND INFORMATION “THE OVERWHELMED CONSUMER” BUSINESS DIRECT MARKET ACCESS -MICROMARKETING POTENTIAL SALES-PROFITS-COST REDUCTION INTERNET – THE DIFFERENCES ARE … PREVIOUSLY ALL SEPARATE VEHICLES CHANNEL MARKET TARGET RESEARCH MARKETS CHANNELS SALES ORGS. ARE NOW INTEGRATED INTO ONE NEW APPROACH! IMC INTERNET ISSUES – STRATEGIC FIT • WHAT TYPE OF BUSINESS DO YOU WANT? • HOW DOES THE INTERNET FIT WITH THE REST OF THE BUSINESS? – ORDER PROCESSING AND ORDER SIZE – COST OF DISTRIBUTION – TYPES OF TRANSACTIONS CONSUMER DIRECT MARKETING CONSUMER TYPES IN-HOME SALES DOOR TO DOOR PARTIES DIRECT MAIL CATALOG FLYERS INTERNET END CAP POINT-OF-PURCHASE FLOOR STAND COUNTER STAND TAG ALONG VENDING MACHINE KIOSK MARKETING END CAP FLOOR STANDS COUNTER STAND COUNTER STAND CONSUMER DIRECT MARKETING CONSUMER TYPES IN-HOME SALES DOOR TO DOOR PARTIES DIRECT MAIL CATALOG FLYERS INTERNET (E-COMMERCE) END CAP POINT-OF-PURCHASE FLOOR STAND COUNTER STAND TELESALES AND TELEMARKETING TAG ALONG VENDING MACHINE INSERTS MAGAZINES NEWSPAPERS TV / RADIO SHOPPING DiIR RESPONSE DIRECT MARKETING LIFETIME VALUE: Membership Program Example Cost of Campaign: 100 new members @ $70 1st year “cost” $10,000 $ 7,000 $ 3,000 -$10,000 - 3,000 2d Year 80 renewals @ $70 $ 5,600 + 2,600 3d Year… $ 5,600 + 8,200 18A PERSONAL SELLING, ETHICS, AND SALES SKILLS SALES RESPONSIBILITIES • – Feedback about client developments – Feedback about your company – Feedback about competitors • – Implement the marketing plan – Communicate your company policies and/or positions – Not an agent • IMPECCABLE ETHICS AND INTEGRITY MAJOR SALES APPROACHES • – Product oriented—profit through sales volume • – Problem-solving—profit through problem solving • – Understand their business—profit through strategic relationships, customer loyalty and satisfaction • Joint Efforts / Joint Teams • – Integrate organizations—profit through sales volume – Strong advantage for large firms competing against smaller firms – Long-term alliances LO2 FORMS OF PERSONAL SELLING SALES PRESENTATION TYPES A stimulus-response presentation is a format which assumes that given the appropriate stimulus, the prospect will buy. A formula selling presentation consists of information which must be provided in an accurate, thorough, and step-bystep manner to inform the prospect. A need-satisfaction presentation emphasizes probing and listening by the salesperson to identify needs and interests of prospective buyers. 20-86 LO2 FORMS OF PERSONAL SELLING SALES PRESENTATION TYPES Adaptive selling is a need-satisfaction presentation format that involves adjusting the presentation to fit the selling situation, such as knowing when to offer solutions and when to ask for more information. Consultative selling is a need-satisfaction presentation format that focuses on problem identification, where the salesperson serves as an expert on problem recognition and resolution. 20-87 SALES FUNCTIONS 1. MANAGING THE PROSPECT FUNNEL 2. THE SALES CYCLE 3. CUSTOMER / PROSPECT CARE 4. INFORMATION DISSEMINATION 5. TERRITORY MANAGEMENT 6. PROFESSIONAL DEVELOPMENT SUSPECT TO GREAT CUSTOMER • • • • • • • • • Suspect Inquiry Prospect Qualified Hot prospect Proposal / quote First purchase Repeat purchaser Long-term or high value customer • Past customer MARKETING DEPARTMENT LEADS VS. COLD CALLS NEEDS & PROSPECT EFFECTIVENESS APPROACH & QUALIFY PRESENT VALUE FAB REAL, FALSE, STALLS HOT PROSPECT DEMONSTRATE HANDLE OBJECTIONS CLOSE Trial / Actual Close COGNITIVE DISSONANCE Copyright A. Whitebread, 2001-2010. QUALIFIED ! FOLLOW-UP CUSTOMER ! YOUR SALES OPPORTUNITY Suspects First-time Prospects customers Disqualified prospects Repeat customers Clients Inactive and Ex-customers Advocates Partners CUSTOMER & PROSPECT CARE • BUILDING A RELATIONSHIP – TRUST – CREDIBILITY COMES THROUGH • KNOWLEDGE – There is no substitute for product knowledge! • PERFORMANCE – Products & services, the organization, and you! • DELIVERING AS ADVERTISED – INFORMATION – FOLLOW-UP AND FOLLOW-THROUGH – ORGANIZE ADDITIONAL RESOUCES INFORMATION DISSEMINATION • TO CUSTOMERS AND PROSPECTS – STANDARD COMMUNICATION – NEW PRODUCTS AND PROGRAMS • TO THE COMPANY – CUSTOMER AND PROSPECT REACTIONS – COMPETITIVE INFORMATION • REPORT SIGNIFICANT EVENTS – What do you think would be a significant customer event? TERRITORY MANAGEMENT • TIME MANAGEMENT • ASSEMBLE RESOURCES • MAINTAIN CONTROL • REPORTING – Call reports, expense, sales … • TERRITORY PLANS AND FORECASTING PERSONAL IMPROVEMENT • EFFICIENCY / TIME MANAGEMENT • SALES SKILLS • • PROVING THROUGH RESPONSE • • • PROFESSIONAL DEVELOPMENT REQUIRED BASIC SALES SKILLS • ASKING OPEN-ENDED QUESTIONING • LISTENING • EVALUATING • PROVIDING INFORMATION • CLOSING THE SALE TRAITS OF GOOD SALES PERSONNEL • • • VERY KNOWLEDGEABLE • • IMPECCABLE INTEGRITY AND ETHICS SALES PERSONNEL TRAITS • IMPECCABLE INTEGRITY AND ETHICS – ETHICAL AND LEGAL ISSUES • • • • • NO FAVORITISM • NO DISCRIMINATION 18B SALES FORCE MANAGEMENT LO4 THE SALES MANAGEMENT PROCESS SALES PLAN FORMULATION 20100 SALES MANAGEMENT ISSUES 1. 2. 3. 4. 5. 6. 7. 8. Organization, strategy, and structure Implementation and orchestration Recruiting and selecting Training and developing Compensation Direct, supervise, and motivate individuals Evaluation Retention SALES MANAGEMENT • 1-ORGANIZATION STRATEGY AND STRUCTURE--Continued • SALES FORCE SUPPORT REQUIREMENTS – MARKETING » SUPPORT » NEW PRODUCTS & SERVICES » HELP WITH ISSUES – COLLATERAL » WHAT TYPES » FOR WHOM? – CUSTOMER SERVICES SALES MANAGEMENT • 1-ORGANIZATION STRATEGY AND STRUCTURE--Continued • SALES FORCE SUPPORT REQUIREMENTS – MARKETING » SUPPORT » NEW PRODUCTS & SERVICES » HELP WITH ISSUES – COLLATERAL » WHAT TYPES » FOR WHOM? – CUSTOMER SERVICES TYPES OF SALES FORCES DIRECT SALES TELESALES NATIONAL ACCOUNTS DIRECT MAIL OEM CATALOG INTERNET RESELLER PARTNERSHIPS MANUF. REP’S FRANCHISES GOVERNMENT LICENSEES HOUSE JOINT VENTURES Copyright A. Whitebread, 2001-2010. PRODUCT SALES STRUCTURE VP MARKETING PRODUCT MANAGER GROUP 1 PRODUCT MANAGER GROUP n SALES MANAGER GROUP 1 SALES MANAGER GROUP n MARKETING COMMUN. MANAGER ADVANTAGE DISADVANTAGE SPECIALIZED KNOWLEDGE FOR SPECIALIZED PRODUCTS MAJOR ACCOUNT PROBLEM WITH MULTIPLE PRODUCT LINE PURCHASES Copyright A. Whitebread, 2001-2009. GEOGRAPHIC SALES STRUCTURE VP MARKETING PRODUCT MANAGER GROUP 1 PRODUCT MANAGER GROUP 2 EASTERN SALES MANAGER WESTERN SALES MANAGER MARKETING COMMUN. MANAGER ADVANTAGE DISADVANTAGE LOW COST OF SALES AND ADMINISTRATION NO SPECIALIZATION - COMPLETE PRODUCTS KNOWLEDGE REQUIREMENT Copyright A. Whitebread, 2001-2009. CUSTOMER SALES STRUCTURE VP MARKETING PRODUCT MANAGER GROUP 1 PRODUCT MANAGER GROUP 2 NATIONAL SALES MANAGER NATIONAL ACCOUNTS MAJOR ACCOUNTS MANAGER MARKETING COMMUN. MANAGER OEM FEDERAL GOV'T. ADVANTAGE DISADVANTAGE DRIVEN BY CUSTOMER TYPE IMPROVED CUSTOMER FEEDBACK HIGHER SELLING AND ADMINISTRATIVE COSTS Copyright A. Whitebread, 2001-2009. COMPLEX SALES STRUCTURE - 1 VP MARKETING NATIONAL SALES MANAGER DIRECT SALES MANAGERS RESELLER SALES MANAGER DIRECT MARKETING MANAGER TELESALES MANAGER OUTSIDE SALES GROUP PRODUCT MANAGEMENT INTERNET SALE MANAGER S NATIONAL ACCOUNTS INSIDE SALES MAJOR ACCOUNTS MANAGER OEM MARKETING COMMUN. MANAGER GOVERNMENT OUTSIDE SALES ADVANTAGE ISSUE DISADVANTAGE DRIVEN BY CUSTOMER TYPE - SPECIALIZED SALES SKILLS [RE]CLASSIFICATION OF ACCOUNTS REQUIRES A LOT OF COORDINATION Copyright A. Whitebread, 2001-2009. COMPLEX SALES STRUCTURE - 2 VP MARKETING NATIONAL SALES MANAGER DIRECT SALES MANAGERS DIRECT MARKETING MANAGER RESELLER SALES MANAGER TELESALES MANAGER GROUP PRODUCT MANAGEMENT INTERNET SALES MANAGER NATIONAL ACCOUNTS MAJOR ACCOUNTS MANAGER OEM MARKETING COMMUN. MANAGER GOVERNMENT THIS BECOMES EVEN MORE COMPLEX WITH -MANUFACTURER’S REPRESENTATIVES -CUSTOMER SERVICES -TECHNICAL SALES SUPPORT -INTERNATIONAL SALES AND SUPPORT WHERE DO YOU THINK CUSTOMER SERVICES SHOULD REPORT? Copyright A. Whitebread, 2001-2009. THE SALES ORGANIZATIONS • 2-IMPLEMENTATION / ORCHESTRATION – UNIT PERFORMS AS A SINGLE ENTITY – COMMON HIGH-LEVEL GOALS AND INDIVIDUAL UNIT GOALS – SIMILAR STRATEGIES AND TACTICS – TEAMWORK LO4 THE SALES MANAGEMENT PROCESS SALES PLAN IMPLEMENTATION 3 - Salesforce Recruitment and Selection • Job Analysis • Job Description • Seek those with good skills • Emotional Intelligence, Aptitude, Fit LO4 THE SALES MANAGEMENT PROCESS EMOTIONAL INTELLIGENCE the ability to understand one’s own emotions and the emotions of people with whom one interacts on a daily basis. • Self-Motivation Skills • Self-Awareness • Managing One’s Emotions • Empathy • Social Skills 20112 SALES MANAGEMENT • 4-TRAINING & DEVELOPING • BASIC SALES SKILLS – – – – PSS OR EQUIVALENT SALES TRAINING MAKING PRESENTATIONS LISTENING READING BODY LANGUAGE » Peace Corps http://www.peacecorp.gov/wws/multimedia/videos/culturalgaffes/ • WHY SALES TRAINING? – STRONGER CUSTOMER RELATIONS – IMPROVED MORALE – INCREASED PRODUCTIVITY SALES MANAGEMENT • 4-TRAINING & DEVELOPING-continued • KNOW THEIR TERRITORY AND THEIR CUSTOMERS • TIME MANAGEMENT • TERRITORY MANAGEMENT – TYPES OF ACCOUNTS SALES MANAGEMENT • 4-TRAINING & DEVELOPING-continued • EXCELLENT COMPANY, PRODUCT, & PROGRAM KNOWLEDGE • LEARN TO MAKE EFFECTIVE PRESENTATIONS • UNDERSTAND SALES PROCEDURES AND RESPONSIBILITIES. • BE PRODUCTIVE AND EFFICIENT LO4 THE SALES MANAGEMENT PROCESS SALES PLAN IMPLEMENTATION Salesforce Compensation Objectives, Control, Equitable Plan design • • • • Straight salary Straight commission Combination with commission or bonus] Nonmonetary 20116 SALES MANAGEMENT • 6-DIRECT, SUPERVISE, & MOTIVATE INDIVIDUALS – BUDGETING AND EXPENSE CONTROL – MOTIVATING AND COACHING • TWO DRIVING FORCES – MONEY [COMMISSIONS AND / OR BONUSES] – RECOGNITION [EGO] » HONORS, AWARDS » SALES INCENTIVE PROGRAMS [Trips, gifts] » SALES MEETINGS SALES MANAGEMENT • 7-EVALUATION • QUALITATIVE • QUANTITATIVE: THE ROLE OF QUOTAS – – – – OBJECTIVES DESIRED RESULTS DETERMINING A FAIR QUOTA OVERASSIGNMENT THE SALES MANAGEMENT PROCESS LO4 SALESFORCE AUTOMATION AND CUSTOMER RELATIONSHIP MANAGEMENT Salesforce Automation (SFA) 20119