94 | European Journal of Marketing 13, 3

Industrial Salesmen as a Source of

Marketing Intelligence
by Charles Moss

The most vital need of a marketing manager operating in today's industrial goods
markets is for detailed, extensive and reliable information to help him in formulating
long range plans and strategies. However scientific or unscientific a manager's style
may be his success depends on his ability to plan for the future. This ability in turn
depends on a knowledge and awareness of the state of his present and potential
markets and the ways they are developing and evolving.
The two main sources of information in industrial markets are the statistical
information collected by government agencies or made available through trade associa-
tions, and the results of specially commissioned market research studies. Increasingly,
however, managers are turning to their own sales forces as a valuable source of
up-to-date information about a whole range of marketing developments occurring at
the individual customer location where they acquire business. The marketing manager
possibly needs more facts and information than any other executive in the company.
In addition he needs a high degree of sensitivity to the psychological subtleties behind
those facts. According to Marting[l] the field salesman is the basic source of both.
The market research study has the advantage of wider coverage than existing and
immediately potential customers but rarely does the market research investigator
have the knowledge and the closeness to the customer to enable him to obtain the
depth of information which can be obtained by the salesman. On the other hand, it
is often argued that the salesman by virtue of his proximity to the customer, his
prime interest in making sales and by his personality (which has to be essentially
optimistic) cannot be an objective observer and reporter of reliable information.
These difficulties can be avoided. The industrial sales force is a very expensive resource
and any way in which its value to the company can be augmented is worth pursuing.
Winkler[2] observes that salesmen are involved in a two-way information flow.
They educate their customers in the latest technical developments and report back
opportunities and developments in the market-place to their companies. Webster[3]
also points to the way industrial marketing efficiency can be greatly improved through
increased reliance upon the salesman as a source of market information. This article*
shows how three very different companies have overcome the problems and developed
procedures for collecting very valuable planning information from their sales forces.
* The information presented in this article was collected in the course of a continuing research project
on "The marketing intelligence contributions made by industrial sales forces as part of the corporate
planning process". The author is grateful to the three companies concerned for their co-operation
and for their permission to publish.
 Industrial Salesmen | 95

All the companies have concentrated upon developing written reporting systems, as
a means of communicating the intelligence from the sales force to the marketing
department, but none of them has ignored the value of verbal contributions of
information. Each of the companies has obtained from its salesmen a review of
the problems that customers have found with the products purchased, and has also
managed to focus the efforts of its salesmen towards the derivation and development
of new product ideas.
The first and second companies considered provide an interesting contrast in the
reporting systems employed. In the first company reports on specific topics (viz.
customer and competitor intelligence) are required at regular time intervals irrespective
of the call pattern of the salesmen. In the second company, whilst salesmen are expected
to provide a similar range of information, this is included in a Visit Report on each
contact with a client. A distinguishing feature of the second company is that it has
arranged for its salesmen to become involved in the planning process by making
predictions of the volume levels likely to be demanded by present and potential
customers. The third company case history reflects yet another contrast from the other
two in the way in which salesmen have provided helpful assistance in the development
of suitable corporate industrial advertising campaigns and the provision of appropriate
sales and publicity literature.

Case History I: Electronics

This company is a large multi-national organisation which has an operating division
selling electronic components into a wide range of industrial markets characterised
by medium- to large-scale technological change. This division operates in a hostile
competitive environment and depends for its future success on a substantial amount
of repeat business. There are twenty salesmen in the division organised on the basis
of market specialisation. Within this type of organisation, Chorafas[4] believes that
the salesman becomes virtually a partner of the customer, so much so that he can
quite literally forecast the future sales and marketing strategies both of his customers
and of his own company. The salesmen all have an engineering education with working
experience in non-marketing functions of the company, and have been exposed to
much formal product and technical training to assist them to fulfil their marketing role.
Salesmen are seen as a valuable source of information concerning potential new
products that could be developed by the company. The information is conveyed to
the Marketing Manager by means of a written report, (unlike the sales force of the
company described in the second case history who communicate their new product
intelligence verbally at meetings specially arranged with marketing staff). The salesmen
supply such information as the following:
(1) the proposed product specification (perhaps stating possible alternatives);
(2) the applications that currently exist for the proposed product;
(3) the pricing bands within which the new product would be situated;
96 | European Journal of Marketing 13, 3

(4) the likely competition which can be expected to affect the marketing of the
product;
(5) the potential volume demand for the product;
(6) the likely length of life of the product specification;
(7) the extent to which services will have to be offered by the company to support
the marketing of the product.
Griffin[5] and Rowe and Alexander[6] have drawn attention to the way salesmen
through their daily contacts with customers, markets and their colleagues in com-
petitive companies can acquire much useful information, and thus become a primary
source of new product ideas in a company.
Salesmen also provide a continuous commentary of information about the problems
and faults occurring with the company's products which give rise to complaints by
customers. A written report is generated by the salesman immediately after a complaint
is brought to his attention. This report contains the following information:
(1) the position and duties of customer personnel responsible for identifying the
problem;
(2) the stage of use of the product at which the problem was noticed;
(3) the length of time from when the product was supplied that the problem became
apparent;
(4) an assessment of the business at risk if the problem is not resolved;
(5) the action required to overcome the problem.
Defining the salesman as a selling agent exclusively is to ignore the opportunity
for significant improvement in product planning efficiency, as Webster[3] has indicated.
Another type of subject-matter covered by the salesmen in their intelligence feed-
back role concerns an analysis of the customers to which the company sells its products.
A separate report is circulated by the salesmen on this. The report is completed every
six months. Intelligence contributed by the salesmen on individual customers covers
the following:
(1) the structure and organisation of the customer unit;
(2) the future pattern of development of the company—new products to be
launched; forward investment plans; diversification strategies etc;
(3) a detailed review of those factors in customer organisations influencing the
future demand levels for the company's components—i.e., inventory policies;
"make-or-buy" capabilities; inspection and quality control policies; manu-
facturing assembly operations; and use of value analysis and vendor rating
appraisals.
The other type of marketing subject-matter where the company salesmen generate
useful feedback involves the competition in the market-place. Information is reported
on a quarterly basis covering the following:
(1) the number of companies competing at each potential supply point;
(2) the organisation of competitor sales forces—particularly commenting on
personnel changes and new strategies being implemented;
 Industrial Salesmen | 97

(3) the strengths and weaknesses of the marketing mix presented by competitors;
(4) the types of contract proposals being issued by competitors, i.e., prices, delivery
dates, credit arrangements, etc. being offered.
In addition to the written feedback of this marketing intelligence, the company's
marketing department believes in providing opportunities for salesmen to render
considerable verbal feedback, mainly via the bi-monthly sales conference. A study of
the minutes of such conferences revealed that these meetings were used to obtain views
from salesmen on the following matters:
(1) the progress being made in negotiating "large" volume orders—those orders
the company regarded as "key" accounts;
(2) the most advantageous selling points to be used in new product literature;
(3) the reasons for the loss of "major" orders;
(4) the development of future trade reciprocity deals;
(5) the policies being pursued by the company with regard to modifications and
variations from the standard product range.
The Marketing Managerfindsthat reports by the salesmen contain facts and opinions
which cannot be obtained from published data available to the company. The sales
reports provide him with background intelligence information upon which future
planning decisions are taken.

Case History II: Machine Tools

This company is a small organisation, employing eight hundred people at a single
manufacturing location. It is involved in the marketing of machine tools and textile
machinery within a narrow range of industrial markets characterised by medium-
scale technological change. Like the first company its products are sold into a hostile
competitive environment, but with one exception. This exception concerns a welding
machine, covered by a patent, which is procured solely by companies of one industry
and where no competition is encountered. There are six salesmen employed by the
company, organised on the basis of product specialisation. All the salesmen have been
in their positions for longer than three years and have diverse backgrounds (three of
them being former engineering apprentices of the company, another is a qualified
accountant, another was formerly in the company drawing office, and another has
solely been in sales positions). When sales training does take place in the company
the emphasis is on technical and product training rather than training to develop the
interpersonal skills of salesmen. The sales force of this small company is responsible
for gathering large amounts of valid and reliable marketing intelligence. There are
four written reports that the salesmen become involved in completing—a Visit
Report, a Product Problems Report, a Lost Orders Report, and a Volume Forecasts
Report.
98 | European Journal of Marketing 13, 3

A Visit Report is completed following every call upon a prospect or customer. The
report has the effect of making the salesmen think in as precise terms as possible
what the purpose and aim of each visit is. The report provides detailed information
upon such aspects of marketing as the following:
(1) Prospect/Customer Information: number of "employees; company structure;
end-products of company; manufacturing operations; number and age of
machines in use; capacity utilisation levels; facility investment plans; company
growth pattern; and the degree of experience customer has with the products
being marketed.
(2) Analysis of Customer Purchasing Decision-Making Unit: the salesman provides
a list of the different personnel he has spoken to in the company and the
reasons for meeting them, together with a list of customer personnel who have
been mentioned in the discussions but have not become directly involved in
negotiations. (The special contribution of the salesman in identifying the
specific individuals and their goals in the buying decision process has been
remarked upon by Wind and Webster[7].)
(3) Product Information: the salesman states the product specification required
by the customer, together with the needs and requirements of the customer
that will be fulfilled by the purchase of the equipment.
(4) Competitor Information: facts are provided on the competitors that have
previously supplied equipment to the potential customer, together with facts
on the competitors currently involved in developing proposals for the customer.
An assessment is also made of the content of quotations being rendered by
competitors.
Like the company in the first case history, this small organisation receives from its
salesmen a continuous monitoring of the problems which customers are finding
with company products they have purchased. The salesmen provide information
about the customer personnel who discovered and reported the problem, because
any future attempts to alleviate the problem must also concentrate on placating the
people who have been affected by the problem. In contrast to the first company, the
salesman provides an assessment of the repercussions that the problem has had on
the manufacturing operations of the customer—this answer from the salesman gives
an indication of the relative importance of the problem confronting the customer.
The report also gives an opportunity to the salesman to list the recommendations he
thinks appropriate for remedying the product problem.
The company salesmen are also responsible for completing a Lost Orders Report
immediately following the termination of negotiations with a customer or prospect.
The salesmen concentrate on providing an evaluation of which particular terms of
the company quotation presented to the customer caused the breakdown of negotia-
tions. They comment on the terms offered by competitors, pointing out the strengths
 Industrial Salesmen | 99

of such proposed terms. An assessment is also made of the chances of submitting

proposals to the customer or prospect in the future.
The final written report that salesmen complete is the Volume Forecasts Report
which is forwarded once per year to the marketing department. This Report involves
a breakdown of the company's share of future volume demands likely to be made by
established customers and potential prospects. The volumes assigned to each account
are given in substantial detail for five years into the future, and in less detail for the
following five years period. The Marketing Manager has found in the past that the
predicted requirements for the first five-year phase of the planning period have
corresponded well with the actual demand encountered. Salesmen also give their
opinion about the amount of priority that should be given by the company to acquiring
the future volumes associated with each account. Kotler[8] comments on a number
of benefits that can be gained by involving the sales force in forecasting especially
where the product is fairly technical and subject to a changing technology.
Verbal contributions of market intelligence by the sales force are also encouraged
within the company. Through a process of a large number of informal meetings between
salesmen and the marketing staff much information is provided for future product
planning. Salesmen make valuable comments on the likely ways the current company
product range will have to be modified in design and engineering terms if the company
is to continue being successful in the future. In the minutes of sales meetings, there are
references to numerous remarks made by salesmen about new applications they have
noticed for the company's products which are being implemented at customer locations.
Also in the sphere of product information the salesmen contribute much assistance to
the marketing department at the time of new product launches by the company.
Three years ago the company Research and Development function were completing
their work on deriving the range of specifications for the new patent welding machines
that were to be introduced to the market. The salesmen were invited to raise any
engineering problems that they anticipated customers might have in using the product.
It was this direct feedback from the sales force which brought to the company's
attention the need to develop a training programme to assist customers in the initial
operating of the welding machines following their installation.
The facts gathered in the Visit Reports, Product Problems Reports, and Lost Orders
Reports form part of an "information bank" which is regarded by the company Sales
and Marketing Director as a valuable source of knowledge when developing the
rationale to support his long-term marketing proposals. The sales volumes provided
by the salesmen in the Volume Forecasts Report form a framework around which
future marketing plans have to be developed.

Case History HI: Cooling Systems

This company is a large organisation (its size, in terms of numbers of people employed
is between that of the companies outlined in Cases I and II) selling compressors,
refrigeration equipment, air-conditioning equipment and cooling towers into markets
 100 | European Journal of Marketing 13, 3

characterised by a more rapid rate of technological change than those catered for by
the companies in thefirsttwo case histories. Its product range is comprised of very large
highly priced units and is substantially different from the product ranges offered by
the last two companies described. The company has virtually no dependence on repeat
business. Also, unlike the other two companies already mentioned, this company sells
numerous services with the product—comprehensive installation, adoption engineer-
ing, and technical advisory services are sold as well as the basic product. The majority
of the provision of these services at customer locations is undertaken by specialist
contracting agents—one must, though, appreciate that the company's marketing and
sales effort is focused upon both the contractors and on the end-users of the products.
Another difference from the other two companies that can be noted is that very little
competition is encountered by this company. However, in order to maintain its
established market leadership the company has continuously to make numerous new
product innovations. There are thirteen salesmen employed by the company organised
on the basis of product specialisation. All the salesmen have an engineering back-
ground gained with other companies. They are exposed to a substantial amount
of product training and technological education administered by the company training
school.
Most of the marketing intelligence which is communicated by the salesmen comes
in a written report which seeks corporate approval for a product development and
manufacturing proposal. Such a proposal is submitted by salesmen when they acquire
a customer interested in a particular product specification. Full details of the specifica-
tion will be given by the salesmen together with comments and estimates on the
following:
(1) the number of markets where sales of this specification could be achieved;
(2) the likely competitive products in the market-place which might affect future
sales of the specification;
(3) the forecast numbers of the specified units which could be sold (at alternative
selling prices)—afive-yearfuture sales plan will be given showing highest and
lowest anticipated levels each year, (salesmen's estimates are especially useful
in industrial markets with a limited number of customers who are well-known
to the salesmen, see McCarthy[9]);
(4) the effects of the foregoing on existing product sales.
Like the sales force of the other two company examples mentioned, the salesmen of
this organisation make a written input of the product problems raised by customers.
The salesmen have to decide either whether the company is at fault with a product
sold (for instance, there might be a design problem) or whether the contractor is at
fault (usually a problem of bad installation). It is important for the company's reputa-
tion to put a careful watch over contractors who have caused any complaints which
have arisen. This complaints feedback generated by the salesmen, is vitally important
to the company in monitoring the work of the contractors.
 Industrial Salesmen | 101

Unlike the other companies described, the salesmen contribute an intelligence

input to the industrial advertising programmes of the company. The views of salesmen
on the formulation of such programmes are always sought and a questionnaire is
completed by them on such matters as the following:
(1) the people the company wants to reach with advertising material (i.e., end-
users, contractors, architects, etc.) and the reasons why these people must be
reached;
(2) the exhibition dates, special functions and new product launch dates at which
such people can be reached;
(3) the geographical areas and the engineering areas where the company needs to
enhance its reputation;
(4) the beliefs that need to be inculcated into prospective buyers of the company
products;
(5) the particular sales objections that have to be overcome;
(6) the specific competitive advantages which need to be overcome;
(7) the trade journals in which advertising material appears most influential in
the markets in which the company operates.
In addition to this written feedback to assist with company industrial advertising
campaigns, the salesmen become involved with publicity literature. For every new
piece of literature developed, a committee of corporate staff (including salesmen) is
established to advise on the content and format of such literature. The verbal comments
of the salesmen are regarded as crucial since they will be the prime users of such
literature. Salesmen also are currently instrumental in making suggestions and com-
ments on the development of sales presentation kits which potential customers will
find useful in improving their understanding of the technical complexities of the
products offered by the company.
It is the view of corporate marketing staff that the work of the salesmen in generating
marketing intelligence will have to expand further within the near future if the company
is to monitor adequately the rapid changes in the technological aspirations of its
customers. The salesmen are often involved in participating with customers in the
development of product concepts, and therefore are the people who first see the
directions in which technological demands are moving. Companies must adjust to a
changing environment if they are to survive and prosper; they must be cognisant of
the fact that with more competition, increasing size, rapidly changing technologies
and markets, and vast investments at risk for longer periods of time, a new marketing
approach is necessary. Hill[10] believes that within this new approach emphasis
should be placed on the need for an information system as a basis for planning,
executing and controlling marketing activities.
102 | European Journal of Marketing 13, 3

Conclusion
The case histories have described how three entirely different companies have found
it beneficial to use their sales forces to generate various types of marketing intelligence.
Bearing in mind that the companies have differing sales force sizes and structures,
and include salesmen from diverse experience backgrounds, a great amount of high-
quality intelligence has been transmitted from the market-place. The companies
producing totally different products and marketing them within contrasting tech-
nological and competitive environments have managed to acquire comparably similar
information from their sales forces—on product problems, new product ideas,
competitor activities and customer plans. The companies have also collected specialised
information from their salesmen—on long-term volume forecasts and industrial
advertising programmes—which has been appropriate to their particular planning
operations. The marketing managers of these companies have appreciated that
salesmen are a very important, high-cost corporate asset and that they are sources of
much valuable knowledge. The three companies reflect practical examples of how
essential information has been communicated from the salesman-customer interface.
Now, as more companies are deciding to plan further ahead into the future to ensure
survival marketing managers are beginning to think more about their information
requirements in order to produce adequate long-term plans and strategies. The market-
ing managers of the companies described have taken cognisance of the intelligence
contributions of their salesmen and as a result have seen that more realistic marketing
planning decisions are made within their organisation.

References
1. Marting, E., Reporting Sales Data Effectively, American Management Association, 1959.
2. Winkler, J., Marketing Planning, Associated Business Programmes, 1972.
3. Webster, F. E., "The Industrial Salesman as a Source of Market Information", Business Horizons,
1965.
4. Chorafas, D. N., Sales Engineering: the marketing of technological products, Cassell, 1967.
5. Griffin, M., "Generation of New Product Ideas", in Wilson, A. (ed.), The Marketing ofIndustrial
Products, Pan Management Series, 1972.
6. Rowe, D. and Alexander, I., Selling Industrial Products, Hutchinson, 1968.
7. Webster, F. E. and Wind, Y., Organisational Buying Behaviour, Prentice-Hall, 1972.
8. Kotler, P., Marketing Management, Analysis, Planning and Control, Prentice-Hall, 1976.
9. McCarthy, E. J., Basic Marketing, Richard D. Irwin Inc., 1971.
10. Hill, R. W., Marketing Technological Products to Industry, Pergamon Press, 1973.