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Sales Management
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Terms in this set (143)

Transactional selling A series of transactions, each one

involving separate organizations
entering into an independent
transaction involving the delivery of a
product or service in return for
compensation.

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Relationship selling Act of working with customers to solve

their problems, improve efficiencies,
and, in general, add value to their
customers' businesses.

Leading versus (1) Communicating with salespeople

managing rather than controlling them, (2)
becoming a cheerleader and coach
instead of a supervisor or boss, and (3)
empowering salespeople to make
decisions rather than directing them.

Sales management All activities, processes, and decisions

involved in managing the sales function
in an organization.

Sales management Consists of three interrelated sets of

process decisions or processes.

Formulation Creation of a sales management process

that takes environmental and other
factors into consideration.

Implementation Involves the selection of appropriate

sales personnel and the creation of
policies and procedures that will direct
efforts toward the desired objectives.

Evaluation and control Development of methods for monitoring

and evaluating sales force performance.

External environment Conditions outside of the company

boundaries that affect the company.

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Economic environment (1) The amount of growth, the

unemployment rate, and the level of
inflation, (2) the existing distribution
structure in an industry, and (3) the
amount of competition in the industry.

Legal-political Three broad categories of laws are

environment relevant to sales programs: (1) antitrust,
(2) consumer protection, and (3) equal
employment opportunity. These are
aimed primarily at preserving and
enhancing competition among firms in
an industry.

Technological The technical environment can create

environment the ability to improve the processes of
managing sales and accounts, provide
opportunities for product development,
and improve transportation,
communication, and data processing.

Social and cultural Social values set the standards for

environment ethical behavior.

Ethics Development of moral standards by

which actions and situations can be
judged.

Natural environment Nature can influence demand for

products. A shortage of raw materials
and the energy needed to make,
package, promote, and distribute
products can lead to limitation on sales
of products.

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Internal (organizational) Five broad categories: (1) goals,

environment objectives, and culture, (2) human
resources, (3) financial resources, (4)
production capabilities, and (5) research
and development capabilities.

Corporate culture Developed by a well-defined mission

together with a successful corporate
history and top management's values
and beliefs. Shapes the attitudes and
actions of employees and helps
determine the kinds of plans, policies,
and procedures salespeople and their
managers can implement.

Drivers of change Six have been identified in reinventing

sales organizations so they can compete
successfully.

Driver of Change 1 Building long-term relationships with

customers.

Driver of Change 2 Creating sales organizational structures

that are more nimble and adaptable to
the needs of different customer groups.

Driver of change 3 Gaining greater job ownership and

commitment from salespeople.

Driver of change 4 Shifting sales management style from

commanding to coaching.

Driver of change 5 Leveraging available technology for

sales success.

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Driver of change 6 Better integrating salesperson

performance evaluation.

Autonomy The freedom of action and opportunities

for personal initiative. The degree of
independence the salesperson can
exercise in making his or her own
decisions in the day-to-day operation of
the job.

Sales activities Multifaceted and challenging activities

that are part of the job of a salesperson,
such as searching out leads, writing up
orders, and learning about the product.

Job variety Sales jobs are seldom boring because

of the different customer needs and
problems for which the salesperson can
work to develop unique solutions.

Intrinsic rewards Rewards inherent to satisfaction derived

from elements of the job or role itself.

Extrinsic rewards Rewards bestowed on the salesperson

by the company.

Work-family conflict A lack of balance between one's work

life and family life such that work is
encroaching on the family.

Telecommute Working from a remote or virtual office,

often at home, and seldom traveling to
company offices.

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Virtual office A location outside the company's offices

where a salesperson works (often his or
her home).

Retail selling Involves selling goods and services to

end-user consumers for their own
personal use.

End-user consumer The ultimate user of the goods and

services for personal use.

Business-to-consumer The sale of goods and services to end-

(B2C) market user consumers (retail selling).

Business-to-business Previously called industrial selling. The

(B2B) market sale of goods and services to buyers
who are not the end-users. Relationship
selling is much more predominant in the
B2B market than in the B2C market.

Trade servicer (aka A type of B2B sales job in which the

merchandiser) sales force's primary responsibility is to
increase business from current and
potential customers by providing them
with merchandising and promotional
assistance.

Technical seller Salespeople increase business from

presently identified customers and
potential customers by providing them
with technical and engineering
information and assistance.

New business seller Salespeople identify and obtain

business from new customers.

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Buying center ...

people

Initiators The people who perceive a problem or

opportunity that may require the
purchase of a new product or service
and thereby start the buying process.

Users The people in the organization who

must use or work with the product or
service.

Influencers The people who provide information for

evaluating alternative products and
suppliers.

Gatekeepers The people who control the flow of

information to other people involved in
the purchasing process.

Buyers The people who actually contact the

selling organization and place the order.

Deciders The people with the final authority to

make a purchase decision.

Controllers The people who determine the budget

for the purchase.

Perceived risk For a firm, when buying a particular

product affects the makeup and size of
the buying center. It is based on the
complexity of the product and situation,
the relative importance of the purchase,
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time pressure to make a decision, and

the degree of uncertainty about the
product's efficiency.

Team selling These structures commonly make the

salesperson responsible for working
with the entire selling team in order to
manage the customer relationship.

Matrix organization An organization of direct reports and

supporting internal consultants who
bring their collective expertise to bear
for a client.

Key account One of a firm's largest customers

(especially one with a large buying
center) whose potential business over
time represents enough dollars and
entails enough cross-functional
interaction among various areas of both
firms to justify the high costs of the team
approach. Key accounts generally have
a senior salesperson as the key account
manager.

Organizational buying (1) Anticipation or recognition of a

decision stages problem or need, (2) determination and
description of the characteristics and
the quantity of the needed item, (3)
search for and qualification of potential
suppliers, (4) acquisition and analysis of
proposals or bids, (5) evaluation of
proposals and selection of suppliers, (6)
selection of an order routine, and (7)
performance evaluation and feedback.

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Single-source suppliers Only one vendor used by a firm for a

particular good or service to minimize
the variation in quality of production
inputs.

Commodity products Standardized, nontechnical items.

New-task purchases Customer is buying a relatively complex

and expensive product or service for the
first time. Typically, this will involve a
much more detailed buying process.

Modified rebuy Buyer is interested in modifying the

product specifications, prices, or other
terms it has been receiving from existing
suppliers and is willing to consider
dealing with new suppliers.

Straight rebuy Customer is reordering an item it has

purchased many times.

Repeat purchases Occurs when a customer buys the same

product under the same circumstances
again and again. It tends to be much
more routine than new-task purchase or
modified rebuy.

Marketing concept Turning to consumers themselves for

input in making strategic decisions about
what products to market, where to
market the products and how to get
them to market, at what price, and how
to communicate with consumers about
the products.

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Marketing mix The four elements of product,

distribution (aka place), price, and
promotion.

Marketing The promotional message used by a firm

communication mix to communicate with customers
(promotion mix)

Marketing Mix 1 Personal selling

Marketing Mix 2 Advertising

Marketing Mix 3 Sales promotion

Marketing Mix 4 Direct marketing

Marketing Mix 5 Public relation/publicity

Market orientation The operationalization or

implementation of the marketing
concept.

Customer orientation The firm places the customer in the

center of all strategic decisions and firm
activities.

Customer-centric Firms high in customer orientation

because they have the customer at the
center of their business model.

Customer relationship The most prevalent implementation of a

management (CRM) customer-centric culture in which the

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comprehensive business model for

increasing revenues and profits focuses
on customers. Three goals of CRM are
customer retention, acquisition and
profitability.

Touchpoints The intersection of business events via a

channel using a medium where the
selling firm touches the customer in
some way, thus allowing for information
about customers to be collected.

Mass marketing (usually Mass marketing evolved in the early

advertising) 1900s and was focused primarily on
obtaining market share using limited
segmentation and huge campaigns.

Target marketing Applying principles of segmentation to

create different strategies and marketing
programs for different consumer groups.

One-to-one marketing Ability to customize offerings for

individual users.

Customer loyalty When customers are highly satisfied with

the relationship and the product
offering, and are very unlikely to switch
to another company and its products or
brands.

Lifetime value of a Pay off in terms of cost savings, revenue

customer growth, profits, referrals, and other
important business success factors. It is
possible to calculate an estimate of the
projected financial returns from a
customer, providing a very useful
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strategic tool for deciding which

customers deserve what levels of
investment of various resources (money,
people, time, information, etc.)

Firing a customer This can occur when a customer exhibits

a low predicted lifetime value and
resources are better used elsewhere.

Data warehouse The compilation of information obtained

from touchpoints and transformation of
that information into useful information
for customer strategy development.

Data mining The use of software techniques to learn

more about current and potential
customers from large data warehouses
of information.

Return-on-customer Related to the lifetime value of a

investment customer, this is the financial evaluation
of a customer relationship.

Strategic direction The mission and goals on which a firm's

marketing strategy may be built and
implemented.

Mission statement The answer to the most basic questions

about a firm's reason for being.

Goals Coming from the mission statement,

goals are more specific targets the firm
wishes to meet.

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Objectives More specific targets than goals.

Objectives should be specific,
measurable, and realistically attainable.

Strategic business units Multiple divisions of a company likely to

(SBUs) have its own objectives and a distinct
strategy for accomplishing them.

Distinctive The quality or attribute of the

competencies organization that sets it aside from its
competitors. How is it, or how will it be,
different from the rest of the pack.

Generic strategies Common strategies pursued by business

units across a variety of industries. Most
common are low cost, differentiation,
and niche or focus.

Marketing program A combination of elements from the

marketing mix to implement the strategy.
It reflects a particular allocation of
financial and human resources.

Market exchanges One-shot transactions that occur

between a buyer and seller without
much thought of future interaction.

Functional relationships Long-term relationships between buyer

and seller based upon close personal
friendships.

Strategic partnerships Long-term relationships in which the

partners make significant investment to
improve profitability of both companies
and jointly achieve strategic objectives.

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Trust Important part of developing long-term

relationships, and represents confidence
that a salesperson's word or promise can
be believed and that the salesperson
has the long-term interests of the
customer at the core of his/her
approach to doing business.

Customer delight Exceeding customer expectations to a

surprising degree. This is a powerful way
to gain customer loyalty.

Upgrading Convincing the buyer to use a higher-

quality product or newer product
(similar to generating repeat sales.)

Preferred supplier In general the supplier is assured a large

percentage of the buyer's business and
will get the first opportunity to earn any
new business.

Pull strategy Attempts by a firm to build strong

customer demand for its brand.

Push strategy Attempts to build reseller support, by

offering direct inducements to potential
wholesalers and retailers to encourage
them to stock the product.

Just-in-time reorder and Process to help resellers reduce their

delivery investments in inventory and improve
inventory turnover.

Supply chain alliances Used to strengthen relationships with

major customers, by involving customers
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in the development of joint information

and reorder systems.

Division and Dividing a function into its component

specialization of labor activities and assigning each activity to a
specialist who can increase the
efficiency with which almost anything is
performed.

Line organization Vertical organization in which the chain

of command runs from the chief sales
executive down through levels of
subordinates. Each subordinate is
responsible to only one person on the
next higher level, and each is expected
to perform all the necessary sales
management activities relevant to his or
her own level.

Line and staff Several sales management activities,

organization such as personnel selection, training,
and distributor relations, are assigned to
separate staff specialists.

Outsourcing the sales Term used to indicate use of agents.

force

Selling agents Intermediaries who do not take title or

possession of goods they sell and are
compensated solely by commissions
from their principals.

Geographic Individual salespeople are assigned to

organization separate geographic territories.

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Product organization Separate sales forces are in place for

each product or product category in
their line.

Organization by Creation of separate sales teams to call

customer type on a particular customer type.

Organization by selling Different salespeople specialize in

function performing different selling functions.

Telemarketing Selling functions are performed over the

telephone.

Major or key accounts Large and important customers.

Team selling Assigning a group of specialists inside

the firm to an individual customer.

Matrix organization Type of team selling in which direct

reports and supporting internal
consultants bring collective expertise to
bear for the client or customer.

Multilevel selling A variation of team selling, where the

sales team consists of personnel from
various managerial levels who call on
their counterparts in the buying
organization.

Co-marketing alliances Joint marketing and sales programs

among suppliers, in order to sell
integrated systems directly to the
ultimate customer.

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Logistical alliances Alliances between customers and

suppliers resulting in the development
of computerized information and
ordering systems for customers to place
orders directly via a dedicated
telephone or satellite link to suppliers'
computers.

Span of control The number of people each manager

supervises.

Market potential Estimate of the possible sales of a

commodity, a group of commodities, or
a service for an entire industry in a
market during a stated period under
ideal conditions.

Sales potential The portion of the market potential that

a particular firm can reasonably expect
to achieve.

Sales forecast Estimate of the dollar or unit sales for a

specified future period.

Sales quotas Sales goals assigned to a marketing unit

for use in managing sales efforts.

Subjective forecasting Do not rely primarily on quantitative

methods (empirical) analytical approaches in
developing the forecast.

User expectations Also known as the buyers' intentions

method method because it relies on answers
from customers regarding their

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expected consumption or purchases of

the product.

Sales force composite Forecasting sales using the opinion of

each member of the field sales staff.

Jury of executive Formal or informal internal poll of key

opinion executives within the selling company in
order to gain their assessment of sales
possibilities.

Delphi technique Uses an iterative approach with

repeated measurement and controlled
anonymous feedback, instead of direct
confrontation and debate among the
experts preparing the forecast.

Objective forecasting Rely primarily on sophisticated

methods quantitative (empirical) analytical
approaches in developing forecasts.

Objective Forecasting Involves placing a product in several

Method 1 Market test representative geographic areas to see
how well it performs and then projecting
that experience to the market as a
whole.

Objective Forecasting Relies on the analysis of historical data

Method 2 Time-series to develop a prediction for the future,
analysis with the relationship between sales and
time as the basis of the forecast for the
future.

Objective Forecasting Relies on the analysis of historical data

Method 3 Moving to develop a prediction for the future,
averages

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sometime using an average of several

years.
Objective Forecasting Typically applied to monthly or
Method 4 quarterly data where a seasonal pattern
Decomposition is evident and the manager wishes to
forecast sales not only for the year but
also for each period in the year.

Statistical demand Attempts to determine the relationship

analysis between sales and the important factors
affecting sales to forecast the future.

Scenario Planning Involves asking those preparing the

forecast a series of "what-if" questions,
where the "what-ifs" reflect different
environmental changes that could occur.

Sales volume quotas These quotas emphasize dollar sales or

some other aspect of sales volume.

Activity quotas Attempt to recognize the investment

nature of a salesperson's efforts in a
letter to a prospect, the product
demonstration, and the arrangement of
a display that may not produce an
immediate sale, but may influence a
future sale.

Financial quotas Help salespeople to focus on the cost

and profit implications of what they sell.
Most commonly used financial
measurements are gross margin, net
profit, and selling expenses to
determine profitability of product sales.

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Sales force deployment Refers to the three interrelated decisions

of (1) sales force size or the number of
territories, (2) design of the individual
territories, and (3) allocation of the total
selling effort to accounts.

Breakdown method Sales force size is determined by the

average salesperson treated as a
salesperson unit, and each salesperson
unit is assumed to possess the same
productivity potential.

Workload method Sales force size is determined by

assuming all sales personnel should
shoulder an equal amount of work, and
management estimates the work
required to serve the entire market.

Incremental method Sales force size is determined by

assuming sales representatives should
be added as long as the incremental
profit produced by their addition
exceeds the incremental costs.

Sales analysis The gathering, classifying, comparing,

and studying of company sales data.

80:20 principle This means it is not at all unusual to find

80 percent of the customers or products
accounting for only 20 percent of total
sales.

Iceberg principle So named because only about 10

percent of an iceberg's mass is above
the water level (analogous to the
symptoms of a problem). The other 90
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percent of the berg is below the surface

(analogous to the real problem), and not
always directly below the tip either.

Isolate and explode A sales analysis technique where the

most significant discrepancies between
actual and standard are identified, or
isolated, and then examined in detail, or
exploded.

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