NUR HASLIZA BINTI HASUNI

BA2405B
MKT623

Exercise Chapter 1

1. Discuss and identify the key affecting the sales organization and sales managers
today.
Innovation
Innovation fuels success in selling today. For many years the dominant sales
approach was 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. In today’s highly competitive
environment, however, customers realize there are benefits in building relationships
between themselves and their suppliers and have thus turned to relationship selling
approaches.
As a result of buyers narrowing their vendor pool, salespeople are being asked
to do more, working with customers to solve their problems, improve efficiencies,
and, in general, add value to their customers’ business. More and more companies
have salespeople with offices at or near their customers’ facilities. Offering this level
of service is expensive, however, and it cannot be provided equally to all customers
across the board. As a result, sales managers must prioritize their customers, creating
partnerships with some while seeking to maximize efficiencies with others.

Technology
Sales Effectiveness Is Enhanced through Technology. Broadly speaking,
technology has had a profound effect on almost every facet of personal selling. Of
course, the Internet has taken the interaction between customer and company to a new
level, creating the ability to remain in touch with the customer (update information,
handle questions, deal with complaints) in ways that have not been possible in the
past. Companies are still learning how to best incorporate new technology into the
business of selling.
 The Internet’s ability to inform, persuade, and enhance the personal selling
component makes it a critical part of sales management in the twenty-first century.
For today’s young salespeople and buyers, the Internet is simply a given—they cannot
imagine what business was like before it! Nearly every company of any size has
created an extensive, integrative, and interactive website to sell and service customers.

Leadership
Leadership Is a Key Component in Sales Management Success. In the sales
environment of the twenty-first century, traditional work relationships are being
questioned and are often replaced with new ones. Nowhere is this more prevalent than
in the relationship between salesperson and sales manager. In the traditional top-down
bureaucratic style, managers were the supervisors responsible for administering the
sales force. Conversely, they were held directly accountable for the actions of their
salespeople. Words like control and manage were used to describe their activities.
The highly dynamic and competitive environment of the twenty-first century
demands a more responsive, flexible approach to sales management. Sales forces are
becoming less hierarchical with fewer layers of management while more
responsibility is being given to the salesperson. Leading versus managing is an
important distinction for today’s successful sales manager. Effective sales
management is now more often defined by how good a leader you are than how good
a manager. Effective leadership of salespeople includes (1) communicating with
salespeople 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. Common across these items is an approach of mentoring,
rather than directing, salespeople.

Globalization
Sales Management Is a Global Endeavor. Innovation, technology, and
leadership are pervasive themes in sales management today. Because companies now
operate in a global marketplace, these themes play out on a global stage. Products are
designed in one country, manufactured in another, and marketed around the world. In
some cases, competitors in one part of the world are partners in another. Global
suppliers have increased the importance of vendor relationships not only around the
country but around the world. The internationalization of business was, for many
years, considered a process of big multinational corporations.
However, in today’s global society even small domestic companies are doing
business in international markets as a result of independent distributor relationships,
trade shows, and the ability of the Internet to generate awareness and interest literally
anywhere in the world. This global focus is driven by a number of factors. As noted
earlier, the ability to communicate anywhere in the world with relative ease has
opened new markets. Potential customers worldwide can call, fax, or e-mail questions
or orders easily.

Ethics
Ethics Underlies All Selling and Sales Management Activities. Characterizing
sales as trending toward more ethical behavior may be unfair to the many ethical
salespeople of the past. But it is true that ethical selling practices, just like ethics in all
aspects of business, is more prominent due to the seemingly endless business ethics
debacles that dominate the news.
2. List the sales management process.
 The formulation of a sales program. The sales program should consider the
environmental factors faced by the firm. Sales executives organize and plan
the company’s overall personal selling efforts and integrate these with the
other elements of the firm’s marketing strategy.
 The implementation of the sales program. The implementation phase involves
selecting appropriate sales personnel and designing and implementing
approaches that will direct their efforts toward the desired objectives.
 The evaluation and control of the sales program. The evaluation phase
involves
developing methods for monitoring and evaluating sales force performance
through appropriate metrics. Evaluation and control allow for adjustment of
the sales program or the way it is implemented when performance is
unsatisfactory.

3. Identify and illustrate the key external and internal factors that influence the
development of marketing strategies and sales program.

External Environment
Economic
People and organizations cannot buy goods and services unless they have the
money. The total potential demand for a product within a given country depends on
that country’s economic conditions—the amount of growth, the unemployment rate
and the level of inflation. These factors must be considered when analyzing market
opportunities and developing sales forecasts. Keep in mind, though, that global
economic conditions also influence many firms’ ability to earn a profit.
A second aspect of the economic environment is the existing distribution
structure in an industry. This includes the number, types, and availability of
wholesalers, retailers, and other intermediaries a firm might use to distribute its
product.

Legal and Political

Many of the changes in society’s values are eventually reflected in new laws
and government regulations—that is, where the social–cultural–ethical environment
intersects the legal–political environment. In recent years, the number of laws
regulating the conduct of business, including personal selling, has increased
dramatically at all levels of government. Three broad categories of laws are
particularly relevant to sales programs: (1) antitrust, (2) consumer protection, and (3)
equal employment opportunity. These laws vary greatly by country and can be very
complex. Salespeople themselves can hardly be expected to know all of the legal
details, hence most sales organizations of any size employ HR and legal experts to
advise sales managers on these matters.

Technological
As mentioned earlier, technology not only influences sales strategies, it often
drives the firm’s capability to effectively sell. Of course, the impact of technology is
obvious with companies like Apple and HP. The most obvious impact of the
technological environment on marketing is in providing opportunities for product
development. Technology advances have been occurring at a rapidly increasing rate,
and new products are accounting for an increasing percentage of total sales in many
industries. For example, historically at 3M more than half of the current sales volume
is generated by products that were not in existence five years ago. Most analysts
believe the importance of new products and services to the marketing success of many
firms will continue to accelerate.
Advancing technology also affects sales management in more direct ways.
Improvements in transportation, communications, and data processing are changing
the way sales territories are defined, sales reps are deployed, and sales performance is
evaluated and controlled in many companies.

Social and Cultural

The values of a society affect marketing and sales programs in a variety of
ways. Firms develop new products in response to trends in consumer tastes and
preferences. Two sets of ethical dilemmas are of particular concern to sales managers.
The first set is embedded in the manager’s dealings with the salespeople. Ethical
issues involved in relationships between a sales manager and the sales force include
such things as fairness and equal treatment of all social groups in hiring and
promotion, respect for the individual in supervisory practices and training programs,
and fairness and integrity in the design of sales territories, assignment of quotas, and
determination of compensation and incentive rewards. Ethical issues pervade nearly
all aspects of sales force management.
The second set of ethical issues arises from the interactions between
salespeople and their customers. These issues only indirectly involve the sales
manager because the manager cannot always directly observe or control the actions of
every member of the sales force. But managers have a responsibility to establish
standards of ethical behavior for their subordinates, communicate them clearly, and
enforce them vigorously.

Natural
Nature influences demand for many products. Of course, natural disasters such
as tornados and floods can influence demand for building products and the like. But
unseasonable weather can damage or enhance sales, depending on the type of product.
Internal Environment

Goals, Objectives and Culture

Successful management of customer relationships begins with top
management’s specification of a company mission and objectives that create a
customer-centric organization. As the company mission and objectives change,
customer management approaches must be adjusted accordingly. A well-defined
mission together with a successful corporate history and top management’s values and
beliefs leads to development of a strong corporate culture. Such cultures shape the
attitudes and actions of employees and help determine the kinds of plans, policies, and
procedures salespeople and their managers can implement.

Human Resources
Modern sales organizations are highly complex and dynamic enterprises, as
are their customers’ firms. The sheer number of people in many sales organizations,
together with the widely varying needs in terms of key success factors in relationship
selling creates challenges. In view of the difficulties involved in recruiting highly
qualified people for sales positions and the often-lengthy training programs needed to
bring new salespeople up to speed on knowledge and skills, it is often difficult to
expand a sales force rapidly to take advantage of new products or growing markets.
Financial Resources
An organization’s financial strength influences many aspects of its customer
relationship initiatives. It can constrain the firm’s ability to develop new value-adding
products as well as the size of its promotional budget and sales force. Companies
sometimes must take drastic measures, such as merging with a larger firm, to obtain
the financial resources necessary to realize their full potential in the marketplace.

Production and Supply-chain Capabilities

The organization’s production capacity, the technology and equipment
available in its plants, and even the location of its production facilities can influence
the relationship selling initiative. A company may be prevented from expanding its
product line or moving into new geographic areas because it does not have the
capacity to serve increased demand or because transportation costs make the
product’s price uncompetitive.

Service Capabilities
Delivering a high level of service quality is an important organizational
capability. Firms that provide great service typically enjoy a strong competitive
advantage in the marketplace and make it difficult both for (1) other firms to compete
for the same customers and (2) customers to switch to competitor sales organizations,
often despite price advantages competitors may have.

Research and Development and Technological Capabilities

An organization’s technological and engineering expertise is a major factor in
determining whether it will be an industry leader or follower in both the development
of value-adding products and high-quality service delivery. Excellence in engineering
and design can also serve as a major promotional appeal in a firm’s marketing and
sales programs, as customers are attracted to innovators and industry leaders. Most
companies are investing heavily in technology, particularly technology that can help
meet relationship selling objectives. In such cases, the firm’s salespeople can
communicate the R&D and technological sophistication to customers as important
value-adding aspects of the company and its products. This capability helps avoid the
trap of over relying on price to get the sale.