Download Part I THE BIG PICTURE

Part I
THE BIG PICTURE
Chapter 2:
Strategy and Sales
Program Planning
Learning Objectives
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Describe the major elements of business
strategy.
State the basic elements of strategic
marketing.
Explain what is meant by strategic
implementation process decisions.
Describe the purpose of a sales force
program and lists its major elements.
Tell What is an account relationship strategy
is and explain its purpose.
Chapter Outline
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Business Strategy and Marketing Strategy.
Factors Influencing Strategic Management.
Business Strategies.
Go to Market Strategy.
Product Development Management (PDM).
Supply Chain Management (SCM).
Customer Relationship Management (CRM).
Sales Force Program Decisions.
LEVEL 1
Top
Management
Decisions
LEVEL 2
Strategy
Implementation
Decisions
LEVEL 3
Sales Force
Program
Decisions
Business
Strategy
Marketing
Strategy
Go-to-Market
Strategy
Customer
Relationship
Management (CRM)
Product Development
Supply Chain
Management
Management (SCM)
(PDM)
Account Relationship
Strategy
Figure 2-1 The Sales Force Decision Sequence
Efficiency & Effectiveness
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Efficiency - getting the most output from the
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least amount of inputs
“doing things right”
concerned with means
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Effectiveness - completing activities so that
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organizational goals are attained
“doing the right things”
concerned with ends
Effectiveness and efficiency are interrelated
and sometimes overlapped.
Business Strategy:
Business Strategy involves defining
and articulating an overall business
mission, developing specific
business goals, and designing a
strategy for achieving these goals.
BUSINESS STRATEGY:
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The factors influencing the strategic
management planning process are
depicted in Figure 2-2.
Environmental constraints
Legal & regulatory
Demographics
Economic Conditions
Technology
Competitive conditions
Sociocultural factors
Distinct competencies
Marketing
Financial
Technology
Information
Strategic Management
Planning
Resources
Financial
R&D
Personnel
Brand Equity
Production
Firm’s history
management culture
Figure 2-2: Factors Influencing Strategic Management
Business Mission:
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A well-defined business mission provides a sense of
direction to employees and helps guide them toward
fulfillment of the firm’s potential. The basic character
of an organization's business is defined by the three
Cs—customers, competitors, and the company itself.
Top managers should ask, “What is our
business?” and “What should it be?” A business
mission statement should include information
regarding (1) the types of customers it wishes to
serve,(2) the specific needs to be fulfilled, and (3)
the activities and technologies by which it will
fulfill these needs.
Establishing Goals:
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the organization’s goals—specific objectives
by which performance can be measured.
These objectives are usually stated in terms
of profits, sales revenue, unit sales, market
share, survival, and social responsibility.
Measurable organizational goals must be
communicated down the organizational
structure.
What Goals are Most Important to You?
70
66.1%
60
50
40
30
29.8%
31.9%
20
14.0%
7.7%
10
0
Building
Brand of
Company/
product
Enhancing Increasing
credibility
sales/
of company revenue
product
Investor
relations
Saving
costs
7.8%
Other
Strategies:
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A strategy is the means an organization
uses to achieve its objectives.
all successful businesses focus on
creating superior customer value by
achieving one of the following market
positions: low cost, differentiation, or a
niche.
MARKETING STRATEGY:
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Marketing strategy is the set of integrated
decisions and actions a business undertakes
to achieve its marketing objectives by
addressing the value requirements of its
customers.
Marketing strategy is concerned with
decisions related to market segmentation and
target marketing, as well as development and
communication of a positioning strategy.
Segmentation and target
marketing
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1- targeting : Target marketing refers to
the selection and prioritizing of segments to
which the company will market.
or to decide where or for whom to go to sell
your product and its involve two steps
:Selecting your markets , and set priorities .
2- segmentation: Market segmentation
involves aggregating customers into groups
that (1) have one or more common
characteristics, (2) have similar needs, and
(3) will respond similarly to a marketing
program.
Positioning
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3- Positioning:
occur in the mind of the customer and refers to how
the customer perceive us versus our competitors .
-Some of the fundamental questions that customers
ask about brands are:
(1) Who are you? (brand identity);
(2) What are you? (brand meaning);
(3) What do I think or feel about you? (brand
responses);
(4) What kind of association and how much of a
connection would I like to have with you? (brand
relationships).
STRATEGIC IMPLEMENTATION
DECISIONS: (level 2)
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Its require cross functional cooperation and
coordination , and in its sales executives work
with top executive from ( marketing ,
operation , engineering , customer service
departments ) in making these decisions .
Strategic implementation decisions refer
to a set of processes that organizations will
develop to create customer value and achieve
a competitive advantage.
STRATEGIC IMPLEMENTATION
DECISIONS: (level 2)
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==The fundamental decisions that most companies
will have to make with respect to these level 2
processes include: (1)How will customers be
accessed? (Go-to-Market Strategy)
An essential set of activities must be performed in
order to attract and retain customers. A go-to-market
strategy defines who will perform these activities and
for which customers.
The process for determining a go-to market strategy
consists of answering the four major questions
shown in Figure 2-5.12
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 go-to-market participants should
perform the essential activities?
4. Which face-to-face selling participants should
be used?
Segmenting the Market:
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Customer segments and go-to-market strategies will
vary depending on the products old. Adult diapers
and baby diapers are very similar in how they are
manufactured, but they have very different go-tomarket strategies. Most adult diapers are sold in bulk
to nursing homes via distributors, and with very little
advertising. Most baby diapers are sold at retail with
massive advertising support.
Customer characteristics commonly used to segment
a market for purposes of developing a go-to-market
strategy include, but are not limited to, the following:
Segmenting the Market:
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• Industry What business is the customer in?
• Size What is the revenue size of the customer? How
many employees? What is the sales potential?
• Geography Where is the customer located? Does
the customer have global operations?
• Behavior Who are the key decision markers? What
are their adoption tendencies? Does the customer
currently use our product? A competitor’s product?
Does the customer buy centrally for all its plant
locations?
Sales Process Activities
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Sales Process Activities:
The sales process activities consist of all
the activities needed to serve a
customer properly.
Figure 2-6 Essential Activities
Interest Creation
Post-Purchase
Pre-Purchase
Purchase
Interest Creation Activities
It include all the ways that the customers
can learn about the benefit of the
product and the company:
 Prospecting.
 Generating leads.
 Creating awareness and interest.
 Providing information.
Pre-Purchase
In this phase customers are actively considering
and evaluating competitive product and
service offerings:
 Explaining features and benefits.
 Qualifying prospects.
 Assessing customers needs.
 Cooperating in problem solving.
 Demonstrating company and product
capabilities.
Purchase
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Negotiating.
Bidding.
Finalizing terms and conditions.
Writing Proposals.
Post-Purchase
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Delivery.
Installation.
Servicing of products.
Addressing customers questions.
Providing information about new
features.
Collecting payments.
Go-to-Market Participants
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Go-to-Market Participants:
The combination of go-to-market participants
that is most appropriate for each customer
segment and type of essential activity will
depend on a number of factors, including
cost, efficiency, and effectiveness. The
efficiency of a marketing instrument refers to
its ability to generate customer contacts for
the money spent. On the other hand, the
more results created from the number of
customers contacted, the more effective the
marketing instrument is.
Figure 2-7 Potential Go-to-Market Participants
Customers and Prospects
Agents
Direct Sales
Distributors Integrators
Force
Retailers
Direct
Alliances
Advertising
Promotion
Direct Mail
Telemarketing
Internet
Indirect
Sales Force Options
Non-Sales Force Options
Company
Figure 2-8 Comparing Various Go-to-Market Alternatives
Low Cost
per Exposure
Advertising
Direct Mail
Internet
Efficiency
Telemarketing
Sales Force
Effectiveness
High Sales
per Exposure
Various Go-to-Market
alternatives
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Advertising and Promotion.
Advertising and promotion consists of
instruments such as broadcast media,
magazines, trade publications,
newspapers, and direct mail.
Telemarketing. Telemarketing refers
to customer contacts utilizing
telecommunications technology for
personal selling without direct, face-toface contact.
Various Go-to-Market
alternatives
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Internet. “Today we notice that trying to get
our customers to purchase through the Web
has not worked. But we do know that buyers
will make their purchasing decisions because
of the Internet.
Face-to-Face Selling Alternatives..
Should the selling be performed by a direct
company sales force, a selling partner, or
some combination? The main outsourcing
options available to most companies are
agents, resellers, integrators, and alliances.
Various Go-to-Market
alternatives
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Independent Sales Agents.
Independent sales agents are not employees, but rather
independent businesses given exclusive contracts to perform the
selling function within specified geographic areas. Unlike
distributors, they take neither ownership nor physical possession
of the products they sell and are always compensated by
commission.
Resellers. Resellers are channel members, retailers, and
distributors, who take title to the offerings they sell to endusers.
(they market their supplies offering to their own customers )
Integrators. Set solutions for complicated problems that end
customer face (powerful buying influence with complex choice )
Alliances. An increasingly popular alternative for accessing
markets is to establish an alliance with another organization in a
joint venture to sell products to specific markets.
Product Development
Management (PDM)
Product Development Management is
the process of developing,
producing, and marketing new
product offerings.
Supply Chain Management
(SCM)
Supply Chain Management is the
integration and organization of
information and logistics activities
across firms in a supply chain for the
purpose of creating and delivering
goods and services that provide value
to customers.
Customer Relationship
Management (CRM)
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It is a comprehensive set of processes
and technologies for managing
relationships with potential and current
customers and business partners.
Successful CRM efforts depends on a
combination of people, processes,
technology, knowledge, and
information.
SALES FORCE PROGRAM
DECISIONS:
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A sales force program is a tool for
planning how the sales force will
perform its role in achieving the firm’s
objectives.
Figure 2-12 Sales Force Program
Marketing
MarketingObjectives,
Objectives,Strategy,
Strategy,and
and
Strategy
Implementation
Program
Strategy Implementation Program
Estimates
Estimatesofofsales
sales
potential
potentialand
and
sales
forecast
sales forecast
Account
AccountRelationship
RelationshipStrategy
Strategy
Desired
DesiredSelling
SellingActions
Actions
and
Behaviors
and Behaviors
Estimates
Estimatesofofsales
salesforce
force
size
and
budget
size and budget
Organizational
OrganizationalStructure
Structure
Competency
CompetencyDevelopment
DevelopmentProgram
Program
Leadership
LeadershipSystem
System
Feedback
Account Relationship Strategy:
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A firm’s account relationship strategy refers to
the type of relationship it intends to develop
with its customers.
this decision determines which customers can
be profitably served because it calls for very
different levels of investment into customer
relationships.
Account relationships may take a variety of
forms, each having major implications for the
sales force with respect to recruiting and
selection, compensation, necessary
competencies, and behaviors.
Types of Account
Relationship:
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1-A transactional relationship is one
in which the relationship is based on
the need for a product of acceptable
quality, competitively priced, and a
process and relationship convenient for
the buyer.
it is usually based on a personal
relationship between individual buyers
and sellers.
Types of Account
Relationship:
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2- Consultative Relationship. A
consultative relationship, a quite common
relationship in industrial markets, is based on
the customer’s demand and willingness to
pay for a sales effort that creates new value
and provides additional benefits outside of
the product itself.
-get very close to the customer and to
intimately grasp the customer’s business
issues.
2- Consultative Relationship
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the sales force attempts to create value for the
customer in three ways:
• Helping customers understand their problems and
opportunities in a new or different way
• Helping customers develop better solutions to their
problems than they would have discovered on their
own
• Acting as the customer’s advocate inside the
supplier’s organization, ensuring the timely allocation
of resources to deliver customized or unique solutions
to meet the customer's special needs.
3-Enterprise Relationship.
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An enterprise relationship is one in which
the primary function is to leverage any and all
corporate assets of the supplier in order to
contribute to the customer’s strategic
success.
-To achieve successful enterprise
relationships, the supplier must deliver
exceptional customer value while also
extracting sufficient value from the
relationship.
Just to remember ??!
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A critical mistake is to assume that
more investment in the customer
relationship will automatically create a
better relationship with improved
results. It turned out, however, that
most customers simply didn’t want
advice or help. They needed packaging
material, pure and simple, and that’s all
they were prepared to pay for.
Investment
by
Supplier
Investment by Customer
Figure 2-13: Alternative Types of Account Relationships