Hair 1e CH 01

Chapter 1
Introduction to Sales
Management
and Its Evolving Roles
PowerPoint presentation prepared by
Dr. Rajiv Mehta
New Jersey Institute of Technology
Copyright Houghton Mifflin Harcourt Publishing Company. All rights reserved.
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Chapter Outline
What Is Sales
Management?
Types, Titles, and
Hierarchical Levels of
Sales Managers
Responsibilities and
Duties of Sales Managers
Expanding Roles of Sales
Managers
What Qualities Are
Needed to Be a Sales
Manager?
Source: Flying Colours Ltd.
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Chapter Outline
Integrating Sales
Management and
Marketing Management
Monitoring and Adapting
to the Macroenvironment
How Well Are Sales
Managers Performing?
Developing Sales
Managers for the New
Millennium
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Learning Objectives
After reading this chapter, you should be
able to do the following:
1. Summarize the basic responsibilities and evolving roles of
sales management.
2. Demonstrate how sales managers can better integrate
their roles with marketing management.
3. Identify and prepare for megatrends that will affect your
future in sales management.
4. Evaluate the selection criteria for sales management and
compare them to your present and potential qualifications.
5. Analyze how the sales managers job is expanding and
what it will mean for your career.
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What Is Sales Management?
Few jobs are more crucial to the ultimate
success of a business than sales management.
Sales management shapes and determines
nearly all the firms interactions with customers.
Sales managers oversee the sales forcethe
direct income producers who determine the
financial health of their organizations.
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Types, Titles, and Hierarchical
Levels of Sales Managers

V.P.
sales
National
sales manager
Zone, division, or
regional sales manager
District, branch, or
field sales manager
Sales supervisor
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Hiring Sales Managers/Leaders
To see a video on hiring sales
managers/leaders, go to
http://www.sellingpower.com/video/index.asp?date=1
1/8/2006
To read the Top Tips for the Newly Appointed
Sales Manager, go to
http://www.cmctraining.org/articles_view.asp?sid=0&
article_id=25
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Responsibilities and Duties
of Sales Managers
Sales managers plan, lead, and control the selling
activities of their organizations.
They continuously monitor and adjust their marketing
strategies to dynamic technological, competitive,
economic, legal, and cultural factors.
Sales managers also consider the interests of the
company's stakeholders, such as these:
employees
suppliers
financial community
media
stockholders
special interest groups
governments
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Figure 1.1: Responsibilities and Duties of
Sales Managers: A Conceptual Framework
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Twenty-First Century
Sales Force Management
Chapters 14 will help you understand the
following:
Introduction to Sales Management and Its Evolving
Roles (chapter 1)
Managing Ethics in a Sales Environment (chapter 2)
Customer Relationship Management and Building
Partnerships (chapter 3)
The Selling Process (chapter 4)
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The Definition of Selling
To see a video on the definition of selling and
the role of the sales manager in managing the
sales management function, go to
2/15/2006
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Sales Forecasting and Budgeting
Sales Forecasting and
Budgeting (chapter 5) shows how
sales managers accomplish the
following:
estimate market potential for their
industry
estimate sales potential for their
company
develop a final sales forecast
Sales managers employ these skills:
quantitative sales forecasting
approaches
qualitative sales forecasting
approaches
A sales budget is a financial plan of
expenditures needed to accomplish the
organizations goals and objectives.
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Sales Force Planning and Organizing
Sales Force Planning and
Organizing (chapter 6) provides
guidelines and direction for most other
sales decisions and activities.
Sales managers need to do the
following:
set sales goals and objectives
establish sales policies and procedures
devise sales force strategies and tactics
implement controls
Sales managers must determine
these things:
the optimal number of salespeople to hire
the best way to structure the sales force
(geographically, by product, by customer
type, or by some combination of these
factors)
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Time and Territory Management
Time and Territory
Management (chapter 7)
helps sales managers
determine which accounts
their salespeople should call
on, when, and how often.
Sales managers must do
the following:
design sales territories
decide individual sales quotas
design a formal routing pattern
for salespeople to follow in
calling on customers
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Recruiting and
Selecting the Sales Force
Recruiting and Selecting the
Sales Force (chapter 8) deals
with sales managers taking these
actions:
identifying sources of potential
sales recruits
devising a system for
measuring candidates against
predetermined job
requirements using numerous
tools and techniques
deciding whether to select or
reject each applicant
Source: Stockbyte
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Training the Sales Force
Training the Sales
Force (chapter 9) deals
with designing programs
to train salespeople.
Sales managers must
answer several questions:
Who should receive the
training?
Who should do the training?
Where, when, and how
should the training be
accomplished?
What should be taught?
Source: Stockbyte
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Sales Force Leadership
Sales Force Leadership
(chapter 10) is the
emotional process of
exercising psychological,
social, and inspirational
influence on individual
salespeople and the sales
force collectively toward the
achievement of organizational
objectives, goals, and values.
Several different theories,
concepts, and approaches to
effective sales force
leadership are explored.
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Sales Force Motivation
Sales Force
Motivation (chapter 11) deals with
the set of dynamic interpersonal
processes that stimulate the initiation,
direction, intensity, and persistence of
work-related behaviors of salespeople
toward attaining organizational goals and
objectives.
Three types of theories that can be used
to motivate the sales force:
content theories of motivation
process theories of motivation
reinforcement oriented theories of
motivation
Source: Triangle Images
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Sales Force Compensation
Sales Force Compensation
(chapter 12) deals with all
monetary payments and benefits
used to remunerate and influence
the performance of salespeople.
Most companies use three main
methods:
straight salarya fixed amount of
money at fixed intervals, such as
weekly or monthly
straight commissionan amount
that varies with results, usually sales
or profits
combinationa mix of salary and
commission
Source: PhotoLink
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Sales Volume, Costs,
and Profitability Analysis
Sales Volume, Costs, and
Profitability Analysis
(chapter 13) is essential to
assure the organizations
bottom-line goal of improving
profitability.
Sales managers need to
analyze sales volume, costs,
and profit relationships by
product lines, territories,
customers, and
salespersons as well as
across sales and marketing
functions.
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Sales Force Performance Evaluation
Sales Force Performance
Evaluation (chapter 14)
must be measured and
evaluated to determine
commissions and bonuses
for salespeople and to make
promotion decisions.
Performance evaluation is
used to do the following:
improve sales force
productivity
take corrective actions to
improve organizational
profitability and performance
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Changing with the Times
Product
strategy
Promotion
strategy
Place
strategy
Pricing
Strategy
Target
market
marketing
largely viewed
from the seller
perspective
emphasis on
management of
the marketing
mix
satisfaction of
individual and
organizational
objectives
marketings role
primarily to
create
exchanges
Old Marketing Perspective
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A Formal Definition of Marketing
Marketing is moving from a transaction orientation to a
customer relationship building orientation.

New AMA definition shifts the perspective more to the
customer side by focusing on delivering value and
managing customer relationships.
The new official definition of marketing approved by the AMA
in 2004 appears below.
Marketing is an organizational function and a set of
processes for creating, communicating, and delivering value
to customers and for managing customer relationships in
ways that benefit the organization and its stakeholders.
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Changing with the Times
focuses on
delivering value
to customers
Product
strategy
Promotion
strategy
Place
strategy
Pricing
strategy
Target
market
focuses on
managing
customer
relationships
moved away from
a transaction
orientation
focuses on
building long-term
customer
relationships
New Marketing Perspective
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Expanding Roles of Sales Managers
3.
Manage the hybrid
sales force
2.
Serve as customer
consultants
1.
Manage customer
relationships
What sales
managers must do
Based on the new marketing definition, there are three major implications
for sales managers:
achieve a continuing
dialogue with
customers,
personalize treatment
of valued customers,
increase customer
retention.
work with
telesalespeople,
telemarketers,
e-commerce salespeople,
direct mailers,
manufacturers agents.
build ongoing relationships
and mutually profitable
partnerships with customers,
encourage salespeople to go
beyond selling and serve as
consultants and partners.
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What Qualities Are Needed
to Be a Sales Manager?

6.
Improve sales force
productivity and
profitability

5.
Monitor competitive
offerings
4.
Provide outstanding
communication
3.
Solve problems
creatively
2.
Make good decisions
1.
Effectively lead and
motivate people
What a good sales
manager can do
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The Field Sales Force and
Headquarters Marketing Support Team
6.
Marketing research
5.
Product publicity
4.
Trade shows
3.
Sales aids
2.
Sales promotion
1.
Advertising
How H.Q. supports
the sales force
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The Field Sales Force and
Headquarters Marketing Support Team
12.
Internet
communications
11.
Public relations
10.
Market development
9.
Product planning and
development
8.
Forecasting
7.
Marketing and
sales planning
How H.Q. supports
the sales force
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Aligning Sales with Marketing
To see an excellent video on aligning sales with
marketing, go to
1/29/2007
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What Marketing Can Learn from Sales
To learn about what marketing can learn from
the sales department, go to
1/28/2007
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Megatrends Affecting
Sales Management
Sales managers must adapt to three major megatrends to
enhance their effectiveness and efficiency:
1. behavioral forces
2. technological forces
3. managerial forces
Source: Flying Colours Ltd
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Behavioral Megatrends
Affecting Sales Management
Buyers attitudes, preferences, and behaviors are
changing, necessitating modification of selling strategies
and approaches.
more expert and demanding buyers
rising customer expectations
micro-segmentation of domestic markets
expanding power of giant retailers
empowerment of customers
globalization of markets
1. Behavioral Forces
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Todays successful sales managers are those who can
make skillful and efficient use of technology to increase
their efficiency and productivity in serving customers.
Technological Megatrends
These include:
sales force automation
virtual sales offices
(home, automobile, or
virtually anywhere)
electronic commerce
2. Technological Forces
Source: Digital Vision
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Sales Force Automation
Virtual Sales Offices Electronic Commerce
portable computers
electronic data interchange
videoconferencing
multifunction cell phones and
satellite pagers
voice mail and e-mail
instant messaging
Home
Office
Virtually anywhere
Internet:
blogs, podcasting
screen-sharing, WebEx
Intranet
Extranet
Source: Digital Vision
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The Use of Technology (Part 1)
To see a video on the effective use of
technology for generating leads to sell, go to
0/20/2006
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The Use of Technology (Part 2)
To see a video on the effective use of
technology for identifying prospects to sell, go to
0/23/2006
1 | 37
Using Technology to Sell Better
Salespeople can
enhance their
productivity by using
telecommunication
tools
Intranets
Extranets
Computers
Fax machines
Pages
Cell phones
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Using Technology to Sell Better
For an interesting article on technology-enabled selling,
see
http://www.computerworld.com/news/1998/story/0,11280,43417,
00.html
For an interesting article on how technology can build
profitable relationships and deliver increased returns,
see
http://www.infinityinfo.com/IndustriesTechnology.aspx
Examples of technologies that salespeople are using
include
http://www.cingular.com/blackberry8700c_consumer
http://web.palm.com/promos/treo700w_microsoft.jhtml?cid=ms3
http://www.pcworld.com/reviews/article/0,aid,123867,00.asp

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Mobile virtual
sales offices
portable computers
(notebook, handheld,
and pocket PCs)
electronic data
interchange
videoconferencing
(via desktop, laptop,
or handheld
computers)
multi-function cell
phones and satellite
pagers
voice mail, e-mail, and
instant messaging
Sales force
automation

Internet
-- blogs
-- podcasting
-- screen-sharing
-- WebEx

Extranets
Intranets
Technological
megatrends
affecting
sales
management
Electronic
commerce
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Managerial Megatrends
efforts to reduce selling
costs
shift to direct marketing
alternatives
certification of salespeople
shortage of business-to-
business salespeople
developments in
information management
3. Managerial Forces
Source: Flying Colours Ltd
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direct mail
(catalogs,
brochures, and
sales letters)
telemarketing
teleselling
personalized e-
mail
kiosks
facsimile
Shift to direct-
marketing
alternatives
database
marketing
data warehousing
data mining
push technology
Managerial
megatrends
affecting
sales
management
Developments in
Information
Management
Selling cost
reduction efforts
Mobile virtual
sales offices
Professional
certification
of salespeople
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Efforts to Reduce Selling Costs
Median cost of a business-to-business sales call is more
than $250 (varies widely by industry and company).
For some large industrial companies, a sales call can
cost $400 to $1,000 or more because of the unusual
complexity of both the selling process and the product
itself.
To reduce selling costs, many manufacturers and
service providers are aggressively seeking alternatives
to large national sales forces (for example, use of
middlemen, part-time salespeople, and direct-marketing
efforts).
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To sell to organizational buyers, several direct marketing
alternatives support or bypass field salespeople:
1. direct mail
2. forms of telemarketing
teleselling
kiosks (or computer
salespeople)
facsimile
personalized e-mail
Shift to Direct Marketing Alternatives
Source: Mark Karrass/Corbis
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Because of the publics negativism toward selling, efforts
have been directed at certifying sales personnel.
Certification usually requires that
a salesperson do these things:
gains a certain amount of practical
experience
enrolls in educational seminars and
courses
passes a sales competency exam
provides some professional
references
agrees to comply with a code of
conduct
Certification of Salespeople
Source: Mark Karrass/Corbis
1 | 45
Certification of Salespeople
For an interesting article on certification of
salespeople, see
http://www.trainingmag.com/training/headlines/article
_display.jsp?vnu_content_id=1001996079
Salespeople can attend professional certification
programs offered by firms such as
http://www.davekahle.com/certification.htm
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Information Management Tools
Sales managers and salespeople can adapt to
megatrends using various information
management tools.

The four key trends in the management of
information include these:
(1) database marketing
(2) data warehousing
(3) push technology
(4) data mining
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1. Database marketing: A database is a large
computerized file of customers and potential
customers profiles and purchase patterns.
2. Data warehousing: A data warehouse is a very
large, corporate-wide database, built with data
from a number of information systems already in
place in the company.

3. Push technology: Push technology is the latest
iteration of e-mail combined with data
warehousing to discern what your customers
need and exactly when they need it.

4. Data mining: Data mining is the process of
using statistical analysis to detect relevant
patterns or relationships between and among
variables in a database.
1 | 48
Database
marketing
Data
warehousing
Data
mining
Push
technology
Information
management
trends
A database is a large
computerized file of
customers and potential
customers profiles and
purchase patterns.
Push technology is the
latest iteration of e-mail
combined with data
warehousing to discern
what your customers
need and exactly when
they need it.
Data mining refers to the
process of using
statistical analysis to
detect relevant patterns
or relationships between
and among variables in
a database.
A data warehouse is a
very large, corporate-
wide database, built with
data from a number of
information systems
already in place in the
company.
1 | 49
How Well Are
Sales Managers Performing?
Some major reasons why
some sales managers may fail
to perform at higher levels are
these:
illogical selection of sales
managers
inadequate sales management
training
lack of a long-run customer
relationship orientation
insufficient blending of sales,
marketing, and financial
knowledge
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Sales Management Hierarchy:
Skill and Ability Requirements
Salesperson
Sales
supervisor
District
sales
manager
Regional
sales
manager
National
sales
manager
Vice
president
of sales

Selling
ability
Supervisory
ability
Managerial
ability
Administrative and
leadership ability
1 | 51
Developing Sales Managers
for the New Millennium
To succeed in the years ahead,
sales managers will need to focus
on the following:
developing closer relationships
with customers
treating salespeople as newly
empowered equals
applying flexible motivational
skills in working with a
multicultural, hybrid sales force
keeping up-to-date on the latest
technologies
learning marketing and financial
skills in order to recommend
competitive strategies
continually seeking ways to
exceed customer expectations
1 | 52
Ethical Situation: What Would You Do?
On a sales call on one of your companys best
customers, the purchasing agent smilingly tells
your salesperson: I had a special arrangement
with the salesperson who used to call on me from
your company. Every time I placed an order, the
sales manager arranged a special gift for me. Are
you going to continue that policy?

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