Chapter 11 Homework: 1.

The complex, dynamic, and competitive environment facing sales organizations has prompted sales consulting firms and academic researchers to identify the most effective sales management practices. This research suggests that the best sales organizations: 1. 2. 3. 4. 5. 6. 7. 8. Create a customer-driven culture thought the sales organization and firm. Recruit, Hire and retain the best sales talent. Train and coach the right skill set. Focus on key strategic issues by segmenting accounts in meaningful ways and providing differentiated offerings to find, win and retain customers. Develop an appropriate and adaptable sales organizations structure. Implement formal sales and relationship building processes. Use information technology effectively to learn about customers and enable salesperson success. Align sales operations with business and marketing strategies.

2. Briefly describe the four different types of strategies sales manages must develop and implement. Sales managers and salespeople are generally responsible for strategic decisions at the account level. A sales strategy is designed to execute an organization marketing strategy for individual accounts. The major purpose of a sales strategy is to develop a specific approach for selling to individual accounts within a target market. A sales strategy capitalizes on the important differences amoung indivudals account s or groups of similar accounts. A firms sales strategy is important for two reasons. First, it has a major impact on a firms sales and profit performance. Second, it influcens many other sales management decsisons such as recuriutment, selection, training, , compensationa and performance. Sales managersmust dewlop stratregies for forming key elements of strategic decision marketing. A discussion on account targeting, relationship strategies, selling strategeisna dna channel strarteies will follow.

Account Targeting Strategy The first challeange a sales m,anager may face is which accounts to purse. All accounts within the target market are not created equally. Some accounts may not be good procespects because they have asoild relatioshnip with a competitor. Evben good prospets or current customers differ in how much they buy, how much they might buy in the future, or how eager tney are to do business with the sales organizations. Accounts may therefore require diffenrt serbvicing. An account targeting strargey is the classification of accounts within a target market into categories for the purpose of developing strategic approaches for selling to each account or account group. The account targeting strategy provides the basis for all other elements of a sales strategy. Just as different marketing mixes are developed to serve different target markets, sales orgnizations need to use differet relatonships selling and sales chanel strategiers for different account groups. Relationship Strategies There is a clear trend tword a relationship orientiation between buyers and sellers. A realationship strategy is a determination oif the type of relationship to develop with sdifferent

account groups. The relationship strategies may range from a trasnatcion relationship based on ease of aquistion and low price to a collaborative relationship where the buyer and seller work closely togerher for the benefit of both businesses. Between these extgremes are intermeiate types of relationships based on a lower commitment from the buyer and seller. Selling costs are increased to serve accounts with huiggher level relationships. Sales organizations must consider the costs associated with using dffeernt relationship strategeus fir dufferbet acciybt groups. The critical task is balancing the customer needs with the cost ot serve the account. Selling Strategy Sucessfully executing a specifuc relationship strategy requirtes a unique selling apporcahc. A selling strategy is ther planned selling approach for each relationship strategy. The stimulious reponce and mental states approaches typically dfit with the transaction relationship strategy. The need statisfaction and problems olving selling strategies are normally used with a solutions relationship strategy, The consultative approach is most effecive with the partnership and collaborate relationship strategies. Sometimes, a collaborative relationship strategy requires a selling strategy that is completely customized to the specifc buyer seller situation. The important point is that achieving the desired tryope of relationship in a productive manner requires using different selling strategies. Matching selling strategies and relationship strategies is an important sleas management task. Sales Channel Strategy Sales channel strategy ensures that accounts receive proper selling effort and coverage. Various methods are available to a selling organization to privide proper coverage to accounts, including a company salesforce, thje intenrt, distrubtors, independin representitves, team selling, telemarking and trade shows. The internet is quaickly becoming a critcal sales chanle in selling to organizaztions, On the surface, it would appear the intenrt is being sued to reduce selling costs. Other applications include reordering, product information, nad linkage to customer and suppoert represenatives. The internet is being blanded not only into other field selling efforts, btu also other sales channels suych as industrialmdistrubtiors, independeant represenatives, and telemarkets. Distributors and other wholesalers provide another sales channel alternative, Duistrubtors usually employ their own salesforce and may carry the products of one manufactuer related but noncompetintg products from different manufactuers., Firms that employe distrrubtors normally have a samell company salesfocve to serve and support the efforts of the distrunbtors. Companies using personal selling can choose to cover accounts with independent represnatives or manufacturer represntavies. Reps are independent sales organizations that sell complementary, but noncompetintg products from different manufactures. Independtn represntativeds do not normally carry inventory or take title to the products they sell. These repts are typically cpmpesanted on a commission basis for products sold. The use of teamselliong is increasing in many firms. This is especcialy true as a sales channel for a firms most important prospect sand customers. Generating the best new proesptd into customers and expanding relationships with the most profitable exsisting customers often requires the participation of many individuals from both the buying and

selling firms. This can be a very expensive sales channel approach, but porsprct and customers seem to appreciate the attention they receive. Trade shows are typically industry sponsored eventd in which companies use a booth to promote products and services to potential and exsisting customers. Trade shows can be used to achieve both selling and nonselling objective.s Selling objecgtives might include testing neew products and closing sales. Nonselling objectives include servicing current customrs, gathering competitive information, indeifying new prospects, and enchainc coproate image. Typically, trade shows are only once a eyar for a few dyas and sholed be viewed as a supplemental method for account coverage. 3. Explain the different types of sales organization alternative. Sales structure Many different types of structures can be used successfully and many variations are possible within each type. Often, the resulting structure is complex and eight considers specialization, centralization, span of control vs. management levels, and line vs. staff responsibilities. Specialization In small organizations, each salesperson could perform all the selling tasks and the sales manager could perform all the management activities lieu. Most organizations are too complex for this structure and require some degree of specialization. Salespeople may sell only part of the product line or call on existing count. Sales managers may only work with new hires or be solely involved with the training of the sales staff. Specialization allows individuals become experts on those tasks and leads to better performance. Centralization A centralized structure is one in which authority and responsibilities are placed at higher management levels. While no organization is totally centralized or totally decentralized, most typically centralize some activities and decentralized others. When building a sales team that encourages the development of relationships with customers, a decentralized structure facilitate such decision making in the field. Span of control vs. management levels Span of control refers to the number of individuals will report to each sales manager. The larger span of control, the more salespeople the sales manager must manage. Management levels determine the number of different hierarchal levels of sales management within the organization. In effect organizations can go one of two ways. In a flat sales organization structure, there will be relatively few sales management levels, with each manager having a relatively large span of control. In a tall structure, there will be more sales management levels and smaller Spans of control. Line vs. staff positions Sales management positions can be differentiated as line or staff positions. Line sales managers have direct responsibility for a certain number of salespeople and report directly to management at the next highest level in the sales organization. Staff sales management positions are not in the direct chain of command in the sales organization structure. Staff managers do not directly manage people, but they are responsible for particular auctions

such as training and recruiting. Staff managers are generally not responsible for sales generating activities. Designing the sales organization The sales organization might be structured and a tremendous number of ways. There are several traditional type to choose from and each has its advantages and disadvantages. Typical structures include geographic sales organization, product sales organization, market sales organization, and functional sales organization Geographic sales organization Probably the most widely used system for dividing responsibility is to organize the sales force on the basis of geographic territories. This is the least specialized and most generalized type of sales force. Salespeople are typically assigned a geographic area and are responsible for all the selling activity used all the customers and prospects in the assigned territory. Theres no attempt to specialize by market, function, or product. The greatest advantage of this structure is the low cost and few management levels. There is also no geographic or customer duplication. The greatest disadvantage of a geographic sales organization is its limited specialization. Products sales organization The type of products sold is another basis for dividing the responsibilities and activities within the sales department. Product specialization signs a salesperson the selling responsibility for a specific product or typically a product line. The objective is for the salesperson to become an expert on the assigned product category. The major advantage of this form of organization is the specialized attention given to each product by the salesperson. There is a downside to the product sales organization: it is extremely costly. If a company Carries many products, then it must hire a large sales force to learn and sell the entire product line. It is costly to have 10 to 15 sales reps within a geographic territory when one or two will do. Market sales organization The focus of a market sales organization is to ensure that the sales force understand how their customers use and purchased their products. Once this is understood, the sales force should be able to direct their selling efforts to better satisfied customer needs. Market specialization has become an increasingly important type of specialization and is growing in use. Market specialization includes selling two governments, education, medical, wholesalers, retailers, military, manufactures, and financial institutions. The biggest advantage is getting to know the customer intimately. This in turn can help develop a better understanding of unique customer needs. Market organizational structure has disadvantages similar to a product organization in that it provides high costs and duplication of effort. functional sales organization Many selling activities are required for a sales organizations success. Entry level salespeople could be groomed to generate leads and qualified prospects, while the more experienced salespeople could concentrate on sales generating activities. This is an example of a firm specializing by function. The major advantage of functional specialization is the efficiency and performing selling activities. Whether generating weeds, qualified prospects, or generating sales, if a salesperson has to concentrate on only one or two of these activities, he

or she can progressively gain expertise. However, there are disadvantages: there is a great deal of geographic and customer duplication requiring extensive coordination between salespeople. Designing a sales organization is a difficult and complex task. Trends do tend to be merging. Organizations are moving courts more specialization as salespeople are concentrating on specific types of customers. Market specialization has become an increasingly important type of specialization. As companies are doing more downsizing and eliminating middle managers, companies are becoming flatter with larger Spans of control. Restructuring in some organizations has caused a move toward decentralization, which has resulted in elimination of staff positions. This in turn has moved companies to outsource their sales training functions to sales training firms. Decisions like these should be based on the specifics of each selling organization; different companies may take on very different strategies. 4. Explain the steps involved in the recruitment and selection process. Typically principle responsibility for recruitment and selection lies with sales managers who have direct supervisory responsibilities for salespeople. This is a critical task as port implementation can be two supervisory problems, increased training costs, inadequate sales coverage, lack of customer follow-up, difficulty in establishing relationships, and inadequate sales force performance. Planning more recruitment and selection When planning for recruitment and selection, it is important to understand the position for which candidates are sought. This can be accomplished by conducting a job analysis, which involves examining the tasks, duty, and responsibilities of the sales job. Once understood what the job involves, determine the qualifications necessary to execute the job. Job qualifications indicate the aptitude, skills, knowledge and personal traits and willingness to accept occupational conditions to perform the job. Typical job qualifications address communication skills, relationship management skills, problem solving skills, education level, sales experience, willingness to travel and relocate, attitude, enthusiasm, empathy, integrity, and self motivation. The companys sales manager or human resource manager uses the job analysis and job qualifications to write a written summary of the job. This is the job description. This provides a picture of what the job involves and the characteristics that they must possess to be successful. It is important that during the planning stage the recruitment and selection objectives are laid out while the objectives determine what is to be achieved, the strategy includes the scope and timing of recruitment activities such as how the job will be pro trade, when the process will occur, the best source for qualified candidates, who will do the recruiting and selecting, and the amount of time getting to a candidate to accept an offer. Locating prospective candidates And the second major step in the recruitment and selection process is to locate perspective job candidates. Both internal and external sources can be helpful in locating sales talent. A very popular internal source is the employee referral program. Adding employees refer sales candidates can be a very effective means of locating good salespeople. In one study, 47% of sales managers survey indicated they found their best salespeople through referrals. Other internal sources include using company newsletters, the company intranet, bulletin boards, meetings, or memos two announced sales job openings.

Private employment agencies will help locate a candidate for a fee typically 15 to 25% of the first years earnings of the employee hired. Companies of ten recruit on college and university campuses where a canned a career fair, in which several employers are brought together in one location for recruiting. Sales managers also use professional organization connections to network and identify potential job candidates. Evaluation and hiring The final step in the recruitment and selection process is a valuation and hiring. Various tools are used to evaluate job candidates in terms of their job qualifications to find the best talent for the job. Having gathered many potential candidates in the recruitment phase, the first step is to narrow the list by screening candidates resumes and job applications. While resumes provide useful insight, a job application can ensure essential information and exclude a necessary information. When the pool is large screening software can help identify the candidates who best match the companys job qualifications. After narrowing the pool of candidates, conduct a job interview to get a more comprehensive look at the candidate. An initial interview that is typically an hour-long or less allows the recruiter to clarify any questions about the candidates job qualifications and make an initial judgment. This is typically followed by a more intensive interview that may encompass several hours or days and may include meetings with several individuals from the employing firm during this interview candidates may be subjected to tests designed to assess intelligence, aptitude, personality, or other interpersonal factors. Depending on the job demands, a physical exam and drug testing may be required. Some companies utilized an assessment center, in which several assessment tools such as presentations, role-playing and exercises, group discussion, and business game simulations are utilized to identify candidates strengths and weaknesses relative two job qualifications. Candidates who make it through the screening process is may be subjected to a background investigation in which references and others are contacted to verify information reported by the job candidate. Finally, the sales manager chooses the sales count that best fits the job qualifications and makes the job offer, or decides to search further. When making the job offer, the sales manager should enthusiasm we pursue the job candidate while being mindful to accurately put read the job. The job offer it should be written but can initially be given orally. 5. Briefly describe each of the steps of the sales training process. Adding hired new talent, the next step in developing them a sales training. An extensive review of sales management research suggests that although who the company recruits is important, it is less likely to be important than what the sales manager does two and with the recruits that determine sales of worse performance. Research indicates that U.S. companies spend around 15 billion a year on sales training, averaging $2000 per year in training expenditures per salesperson, all in an attempt to maintain or improve the performance of the sales force. Some research suggests that went well designed and executed, sales training has the fastest return on investment that a company can make. Sales managers play an important role in both planning and implementing sales training. Assess sales training needs The first step is to conduct a needs assessment to determine the extent to which the sales force possess the skills, attitudes, receptions, and behaviours required to be successful. A variety of methods can be used to determine necessary training needs. In some cases, performance testing is conducted to determine the proficiency of salespeople in a particular area, such as product knowledge. In other cases, by simply observing the sales force sales

managers can identify training needs. Some firms conduct a sales for survey whereby salespeople are pulled to determine where they believe the need training. Similarly, a customer survey might be conducted to ask customers where they believe salespeople are deficient in serving their needs. Finally, the job analysis discussed earlier can be used to provide insights regarding training needs. While any number of training needs might be identified, typical needs include sales techniques, time and territory management skills, and knowledge regarding products, customers, and competitors. Set training objectives Of the After determining the areas in which sales training is needed, training objectives should be set. The objectives will vary by training needs, but all should be specific, measurable, and attainable to maximize their effectiveness. General objectives might include increasing sales or profits by a certain amount, teaching salespeople relationship building skills, or improving the ethical decision-making of salespeople. Setting objectives help sales managers to determine training expectations and avoid straining simply for training sake. Evaluate raining alternatives The third step of the sales training process, the sales manager evaluates various options for achieving their training objectives. Criteria including cost and time constraints, training location, flexibility training materials, and opportunity for reinforcement training should be established for evaluating the alternatives. In this step of the process, the sales manager must decide who will do the training, where will be conducted, and what methods and media will be used. Typically sales training is done by company personnel such a sales managers, senior salespeople, or company sales trainers. Sometimes companies find it more effective and efficient to hire an outside sales training company. Although some organizations utilized central training facilities were off site locations, the sales organizations home, regional, sales offices are typically where the training is conducted. When it comes to training methods, theres a variety from which to choose that can be broken down into four categories. One method involves a training provider lectures, demonstrations, in class discussions in a classroom a conference setting. This might be used for teaching product knowledge or legal and ethical issues, among other topic. The second method, on the job training, involves salespeople learning while doing the job, often with the help of the supported mentor or sales manager. Behavioral simulations, whereby learning occurs to simulate experience to the use of business games, simulations, and role-play, offer yet another training method. Games and simulations offer means for salespeople to practice skills for decision-making and contrived but relevant environment by playing games or interacting with a computer to address simulated real world selling scenarios. Role-playing is extremely popular and generally involves one trainee playing the salesperson and the other the buyer as they interact in a simulated sales presentation. Finally, absorption training involves providing trainees or salespeople with materials that they can study on their own, such as product manuals were salespeople. The media used to deliver the training message must be also chosen. While personal or written media have long been used, advances in technology allow for providing training materials via the Internet or a companys intranet, thus the personal computer, video web conferencing, online chat room, satellite television feeds, sales training software, e-mail among others. Design the sales training program Step four in the sales training process involves committing resources to the training so that inputs from the first three steps can be used to design the actual training program. Budget

approval may have to be attained. The responses to what, how, where, and when are finalized as the ideas from the first three steps materialize. Perform sales training The fifth step involves actually conducting the training as planned. During this stage, the sales manager should monitor the progress of trainees and ensure that training topics are being adequately covered. At the beginning of training, it is important to make sure that the trainees understand how the training will benefit them as this is likely to improve their motivation to learn. Conduct follow-up and evaluation A final step in the training process is to determine the effectiveness of the sales training. This can be done in a variety of ways clicking trainee feedback, exams, sales manager observations of trainees back in the field, customer feedback, new business and sales volume growth, and return on investment, among others. It is also important to do training reinforcement that is integrated with the salespersons current work to enhance behavior change, as one study of over 6000 sales professionals found that training participants remember only half of what they learned within five weeks of training.

6. What are the differences between transactional and transformation a leadership? Which style of leadership is better and why?

Directing the sales force includes two abroad dimensions: leadership, manager ill, and supervisory functions; and motivation and reward system management. In more progressive sales organizations, the leadership, managerial, and supervisory functions are not entirely a collection of top down processes in which higher ups dictate what subordinates must do. Rather, these functions are shared responsibilities in which senior sales leaders, field sales managers, and salespeople play an active role in leadership, management, and supervision. Sales leadership includes activities that influence others to achieve shared goals to advance the organization. Sales management focuses on planning, implementation, and control of the sales management process. Sales supervision involves working with subordinates on an ongoing bases. Senior sales leaders, sales managers, and sales people are frequently engaged in sales leadership, sales management, and sales supervision activity. Sales managers who have salespeople reporting directly to them than spend a considerable amount of time working with salespeople in their respective territories are referred to as field sales manager. Directing the sales force also includes motivating salespeople and managing the reward system. The most commonly used definitions of motivation have three dimensions: intensity, persistence, and direction. 10 city is the amount of mental and physical effort salespeople expand. Persistence is the salespersons ongoing choice to expand effort, especially when faced with adversity. Direction recognizes that salespeople may make choices about how they spend their time on the job. To be fully motivated, salespeople must expand enough effort on the right job activities and be capable of pursuing goals even when they do not have immediate success.

Reward system management involves the selection and administration of organizational rewards to encourage salespeople to achieve organizational object. rewards include compensation such as salaries, bonuses, and commissions and noncompete station rewards such as recognition and opportunities for growth and development. Sales leadership approaches One way to use sales leadership is in terms of leadership style, which is a general orientation applied to leadership activities. Among many alternative leadership styles, to have received the most attention in sales management. A transactional leadership style relies heavily on the use of rewards and punishments, which are administered according to subordinates job performance. A transformation will leadership style is quite different in that it concentrates on inspiring employees to engage concern behaviours and to perform at high levels. Port and dimensions of transformation all leadership clude articulating a vision, meeting as a role model, encouraging acceptance of group goals, giving individual support, and providing intellectual stimulation. There are many variations of these two basic leadership styles, and current research indicates that the most effective leaders use multiple leadership styles depending on the situation. Bus, in some cases, effective leadership could call warrant the use of rewards and punishments in a transactional mode, while other leadership challenges our best interest through one of or more dimensions of transformation a leadership. Another way to view sales leadership is to focus on the relationships between the sales manager and each salesperson within the work unit. This is referred to as the leader member exchange LMX model study of the LMX model indicate that when sales managers and sales people establish Mutual Trust, there are positive impacts on salespeoples job satisfaction, receive job climate, willingness to change, goal commitment, and performance. Given the emphasis on establishing Trust-Based relationships with customers, it seems highly appropriate that sales organizations would embrace trust building between sales leaders, sales managers, salespeople, and other key people within the organization. In the in tensely competitive, ever changing business environment facing many sales organizations, and need to move quickly is essential. In such situations, it is advantages to have interpersonal trust between the key players. As is true in the sales process, trust between sales managers and sales people can be built through demonstrated expertise, dependability, candor, compatibility and like ability, and being responsive to the needs of the other party. With these thoughts in mind, we will now discuss several key areas that should be considered when directing a sales force. The role the power As people work together, they routinely exercise various forms of power to influence the actions of others. According to the pioneering work of social psychologists French and Raven, individuals in the workplace may establish power by virtue of their position; for example sales managers have the right of power to direct salespeople simply because they are higher up on the organizational chart. Sales managers also have the power to reward and punish salespeople based on job performance and job behavior. Both salespeople and sales managers have power related to their job knowledge and expertise. In some cases, highly knowledgeable top performing salespeople will be great deal of power in their dealings with sales manager. Salespeople and sales managers also have power based on their interpersonal skills and their ability to work well with others.

The use of power in leadership, management, and supervision is essential, but it is wise to use it and judiciously. Who for example, sales managers who will reuse the power of their position in a my way or the highway approach will most likely have difficulty in motivation and retaining top salespeople. The same is true for managers who will rely on punishment for the course and tool and directing salespeople. To use power effectively, sales managers should: Not be reluctant to use any form of power in the situation warrants in.