SALES MANAGEMENT
Introduction:
A thriving business needs competent sales
management to meet revenue and sales goals.
Also, sales managers must ensure that the
sales team is appropriately supported. Sales
management is an important role in an
organization. The sales manager handles
many responsibilities, from hiring and
managing sales staff to ensuring that sales
projections are met. Read the concepts in this
lesson to know more about sales
management.
WHAT IS SALES MANAGEMENT?
Definition Committee of the American
Marketing Association
Sales management - is defined as “the
planning, direction and control of personal
selling, including recruiting, selecting,
equipping, assigning, routing, supervising,
paying and motivating as these tasks apply to
the personal sales force”.
Rachman and Romano
- Sales Management includes recruiting,
selecting, training, supervising, motivating and
evaluating the sales-force”
Hampton and Zabin
- Sales Management is primarily the direction
of men with all the management functions, of
organization, control, recruitment, training,
supervision and motivation.
Han- R. Tosdal
- Sales Management is the part of the
management in which the aim of an
organization is to make provision for the sale of
the produced commodities
B. R. Canfield
- “Sales Management involves the direction
and control of salesmen, sales planning,
budgeting, policy making, coordination of
marketing research, advertising, sales
promotion and merchandising
- Integration in the marketing programme of all
business activities that continue to the increase
of sales and price
Sales force is responsible for the sale of
products of a company and to add profit to the
business operations and fulfill social
obligations.
Sales force should be hardworking, result-
oriented, well-educated and competent to
handle changing situations. Technical
developments that are taking place at a rapid
speed have made the task of sales force more
challenging.
Nature and Importance of Sales
Management
Sales management helps to achieve the
organizational objectives.
The main objectives of the sales management
is that products should be sold at that price
which realizes profits.
Buyer and sellers both have same types of
business relationships. This relationship is
based on exchange of good, services and
money.
Sales person develops a positive
relationship with the customers. The role of
sales team is interdependent and success of
one team member depends on the other.
The sales team continuously monitor the
customer preference, competitors’ situation
government policy and other regulatory
bodies.
Characteristics of Sales Management
1. Key Function — Sales management is a
key function in many kinds of enterprises.
Manufacturing and wholesaling enterprises
encounter a wide range of sales problems. Still
and Cundiff state, "Sales management
problems exist even in companies not
employing sales personnel."
2. Responsible — It is responsible to an
important part of marketing functions. It is also
responsible for the effective functioning of
personal selling activities. Sales managers
have still other responsibilities. They are
responsible for participating in the preparation
of information critical to the making of key
marketing decisions, such as those on
budgeting, quotas, and territories.
3. Role — Sales managers participate in
decisions on products, marketing channels and
distribution policies, advertising and other
promotion, and pricing. Still and Cundiff said,
"The sales manager is both an administrator in
charge of personal selling activities and a
member of the executive group that makes
marketing decisions of all types."
4. Strategic Function—Sales management
achieves personal-selling objectives through
'personal-selling strategy.'
5. Development of Human Resources
- According to Boone and Kurtz, "Sales
management effort may be exerted in the
direction of securing, maintaining, motivating,
supervising, evaluating and controlling an
effective field sales force." Thus, the modern
concept of sales management revolves around
the development of human resources.
6. Specialized Function
- Sales management is a significant branch of
general management. It is one of the highly
specialized functions of general management.
A salesman must be an expert in his job.
Hence, sales management is a field of
specialized knowledge.
7. Consumer Welfare
- The scope of sales management is not
confined not only to self-centered corporate
goals of profit and sales maximization and
sustained growth. It goes well beyond these
towards consumer welfare, satisfaction, delight
and maximum social advantage by making
available the goods and services to the needy
consumers in the right time and at reasonable
prices, at the place wanted.
8. Customer-oriented
- Sales management is expected to be
customer-oriented. It produces what is needed
by the customers in the quest of maximum
social welfare. 'Customer delight' is the
fundamental guiding principle of sales
management.
9. Functional Area
- Sales management represents one of the
most important functional areas
management. It also represents all the
principles of general management such as
planning, organizing, direction, motivation, and
control applied sales activities and sales-force
for securing better business performance, viz.,
reasonable profits through sales.
10. Challenging Profession
- Sales management is a challenging
profession. k n responsible for obtaining sales
volume, handling sales operations so as to
make contributions to profits, and for ensuring
continuous growth. Sales executives inure the
delivery of products with customer satisfaction
11. Goal
- The objectives of sales management include
achieving sales results giving major
contributions to profits, and experiencing
continuous growth.
SALES MANAGEMENT FUNCTIONS
Sales management is the attainment of
sales force goals in an effective and
efficient manner through:
Planning - The conscious, system process of
making decisions about goals and activities
that an individual, group, work unit, or
organization will pursue in the future and the
use of resources needed to attain them.
Staffing - Activities undertaken to attract,
develop, and maintain effective sales
personnel within an organization.
Training - The effort put forth by an employer
to provide the salesperson job-related culture,
skills, knowledge, and attitude that result in
improved performance in the selling
environment.
of
Leading - The ability to influence other people
toward the attainment of objectives.
Controlling - Monitoring sales personnel’s
activities, determining whether the organization
is on target toward its goals, and making
corrections as necessary.
SALES MANAGEMENT OBJECTIVES
1. Sales Volume - Through efficient sales
management, the organization wishes to
increase the number of units sold. This will
ensure that the production facilities do not
remain idle and are utilized to the fullest.
2. Contribution to Profits - Sales
management has the objective of improving
the profits of the organization through effective
planning, coordination, and control. Sales
management strives to increase sales and
reducing costs, this ensures good profits for
the organization.
3. Continuing Growth - With sustained and
continuous sales management techniques, the
organization tends to gain market share and
results in the growth of the organization.
4. Market Leadership – With increased sales
volumes and profits, ‘sales management’
enables an organization to become the market
leader.
5. Converting Prospects to Customers  product or services from which they can derive
– Getting prospects to become customers is an
art and a science, it requires good planning
and sustained efforts. This is accomplished
through sales management.
Sales executive function & qualities
Functions of sales executive:
Operating Functions
- Sales force management
- handling relationship with company as well as
marketing channels
- Communicating and coordinating with other
marketing executives and reporting to some
superior executives such as vice president-
marketing.
Planning Functions
- setting personal selling goal
- formulating sales policies and personal
selling strategies
- designing the sales programmes
- controlling sales activities like sales volume,
selling expenses
QUALITIES OF SALES EXECUTIVES:
1. Ability to define the position's exact
functions and duties in relation to the goals to a
company should expect to attain.
2. Ability to select and train capable
subordinates and willingness to delegate
sufficient authority to enable them to carry out
assigned tasks with minimum supervision.
3. Ability to utilize time efficiently.
4. Ability to allocate sufficient time for thinking
and planning.
5. Ability to exercise skilled leadership.
Salesmanship - It is the art of successfully
persuading prospects or customers to buy
suitable benefits thereby increasing their total
satisfactions.
Personal Selling - Personal selling refers to
personal communication with an audience
through paid personnel of an organization or its
agents in such a way that the audience
perceives the communicator’s organization as
being the source of the message.
Differences between Salesmanship and
Personal Selling
Salesmanship Personal Selling
- Narrow Concept - Personal selling is
- This involves only meant for implementing
selling of the product or marketing programs.
service - Broader Concept
- Salesmanship skills
are used in personal
selling
- It’s persuading activity
SALES MANAGEMENT SKILLS
1. Conceptual and Decision Skills - Refer to
the cognitive ability to see the organization as
a whole and the relationships among its parts.
2. People Skill - Involve the ability to work with
and through other people and to work
effectively as a group member.
3. Technical Skills - The ability to perform a
specialized task that involves a certain method
or process.
SALES MANAGER SKILLS
Hire and retain the right sales team
- Good to Great author Jim Collins wrote,
“The most important decisions that business
people make are not what decisions, but who
decisions." For sales managers, recruiting may
well be the most important thing you do. And
yet, since most sales managers don't hire on a
daily or weekly basis, it can be challenging to
create an effective sales hiring process.
Focus on performance management
- As a sales manager, performance
management is at the heart of your job. Sales
managers are responsible for supporting their
salespeople with goals, coaching, and
resources while maintaining an authentic
interest in their personal growth. Performance
management is what makes this growth
happen.
Learn how to coach effectively
- Effective salespeople aren't born. They’re
created through experience, intensive training,
and effective sales coaching, often from sales
managers who make it a point to help their
team members succeed. To be successful as a
sales manager, evaluate each member of your
team as an individual and determine how
coaching can help them grow as a
salesperson.
Know the numbers
- As a sales manager, numbers will be your
new best friend. Which numbers? Analytics on
how the business is performing. This data will
illuminate areas that need extra sales attention
so you can pass down advice to reps.
Rethink your approach to leadership
- Some managers confuse leadership with
power. Being an effective sales team leader
means understanding your true role as a
leader. Sometimes a leader isn’t the loudest
person in the room. Sometimes being a leader
means listening, or pitching in on some not-so-
glamorous duties if a team member is
unexpectedly away.
THE SALES ORGANIZATION
Effective sales executives insist upon the
sound organization. They recognize that the
sales organization must achieve both
qualitative and quantitative personal selling
objectives.
Over the long haul, it must achieve
qualitative objectives concerning personal
selling’s expected contributions to achievement
of overall company objectives. In the short
run, it must attain the quantitative personal –
selling objectives not only sales volume but
other objectives related to “profit”(such as
keeping selling expenses within certain limits)
and to “competitive position”(such as
attaining given market shares). achieving
short-run quantitative personal selling
objectives precede the attainment of the long-
run qualitative personal selling objectives.
The effective sales executive looks upon the
sales organization both with respect to “here
and now” and to the “future.” But the sales
organization effective sales executive builds
both sales-minded less and profit-mindedness
into the sales organization.
LESSON 2
Topic: A.    Management's Social
Responsibilities
B.    What Influences Ethical
Behavior?
C.   Management's Ethical

Responsibilities
D.   Ethics in Dealing with
Salespeople
E.    Salespeople's Ethics in
Dealing with Their
Employers
F.    Managing Sales Ethics
1. Explain the Historical Perspective in Global
Business
2. Recognize the Global Markets
3. Identify World Trade Routes and
Communication Links
Introduction:
Understanding the geography and history of
a country can help a marketer have a better
appreciation for many of the characteristics
of its culture. A culture of people evolves in
response to the environment which it
confronts.
The geography of a country, its topography,
climate, physical position relative to other
countries affect a culture’s evolution including
its marketing and distribution systems.
It is important for a marketer to understand that
geography plays an important role in the
economy of a country and its marketing
system.
 Social, Ethical, and Legal Issues in Selling
Management’s Social Responsibilities
- Social responsibility is management’s
obligation to make choices and take actions
that contribute to the welfare and interests of
society as well as to those of the organization.
- Social responsibility is having a sense of
duty to society and everything that is a part of
it. In other words, “social responsibility” means
managers are accountable to society at large,
not just their shareholders.
- Social responsibility is an important aspect
of capitalism at large. Individuals and
consumers place trust in businesses to “do the
right thing”, and take a leadership role in
making the world a better place. A world with
more socially-responsible managers also leads
to fewer government regulations, since
regulations are almost always introduced as a
reaction to businesses profiting at the loss of
society around them.
What does it involve and who does it
involve?
The business itself (through its mission and
vision statements), those put in charge of
running (the managers), and people that
produce value for it (the rank-and-file
employees) are expected to act socially
responsible. This means they have to be
virtuous in who they are and what they do; that
is, think in the best interests of the public, act
on those best interests, being able to face the
consequences of those actions (if they ever
arise), controlling negative behaviors that could
lead to negative outcomes, and most
importantly, being fair to yourself and those
around you.
Upper management such as the chief
executive officers (CEO), the chief financial
officer (CFO), the chief operating officer
(COO), the chief technology officer (CTO),
the chief marketing officer (CMO), the
directors, the presidents, the senior vice
presidents, the vice presidents, the sales
managers, and many others are charged with
being the role models, supporters, the
enforcers, the implementers, and the
delegators of social responsibility. In other
words, social responsibility usually comes from
the top, with the highest-level managers
encouraging their subordinates to act with
social responsibility. This is usually done
through the company’s mission and vision
statements, implementations of internal
controls, and specific goals laid out in the
business plan.
Besides the management, there are those who
keep such people in line and making sure that
they are accountable and responsible for
everything that happens: you, me, the media,
the government, regulatory agencies, critics,
customers, investors, activists, and so forth.
“Bad press” and “good press” are the
biggest motivators for managers to act with
social responsibility. If the public sentiment
starts viewing a company negatively, its
competitors will be very eager to start stealing change to their products or way of doing
business. business.
Everyone is a stakeholder; including the
owners (shareholders), employees, customers,
suppliers, and society at large. The internal
Accommodating
stakeholders are those inside the company,
and the external stakeholders are everyone
- Do whatever you can to be socially
outside of the company.
responsible by integrating it into your life, your
career, and into your work, that way it will not
How should managers approach social
be an extra burden to you because it would
responsibility?
already be a part of you. By being more
accommodating you will make it harder for
Management should make every effort to
critics to question your management ability or
appear and become socially responsible in
implicate you in crimes against social
everything they are, what they do, and who
responsibility.
they represent. This helps keep the company
in high esteem with their customers, but also
- In other words, when valid concerns are
proactively avoids problems caused by new
raised, socially responsible managers need to
regulations (either by preventing their passage,
actually do something about it. This does not
to begin with, or already being prepared for
mean changing the entire way an organization
them once they are enacted). Managers can
does business with every valid complaint, but it
be socially responsible by focusing on four key
does mean managers address complaints
areas.
coming from outside the organization while
mapping the company’s path forward.
 

Constructive
Proactive
Being and becoming socially responsible is
about working with people who are able to
Take the necessary steps to make social
identify when something is socially responsible
responsibility happen and not wait around for
or irresponsible. Social responsibility is about
others to follow through with it. Make sure that
listening and learning about the people and the
the structure of social responsibility is in place,
environment from which it will apply. Being
but always follow up just to be sure that
constructive means listening to complaints,
everyone is complying with it because even if
coming from both inside and outside of the
one person diverges, detraction will soon
organization, and being willing to act on those
follow.
complaints.

Companies get the best press if they are

Open-minded
proactive and address social issues before
they are forced to do so by government
The past is in the past, pay attention to the
regulation. For example, the Heinz brand
here and now, the moment in time where it
became nationally beloved after it became the
actually counts. Do not be afraid to try new
first major food manufacturer to lobby in favor
things or consider different options to social
of the Pure Food and Drug Act, a major social
responsibility because things will continue to
issue that other manufacturers were fighting.
change and it is something we all have to deal
Nobody will celebrate a brand if they simply
with as we approach the future.
follow the bare minimum responsibility that the
law requires, but brands can build a loyal
This means companies need to be willing to
following by being ahead of the curve.
listen to new research and new concerns
coming from outside the organization, even if
those concerns might mean a fundamental
Ultimately, a manager must decide whether to
become stiff and stagnant or adapt and change
towards social responsibility. If the former is
chosen, the manager might be publicly
scrutinized, penalized, fined, jailed (if they
remain stubborn after government regulation is
implemented), or worse, totally unemployable
(by becoming a villain in the eyes of the
public). By choosing the latter, the manager
will live to fight another day, become
recognized for their valiant efforts for social
change, and be remembered as this great
person we all should try to be. Social
responsibility should not be a second thought;
it should be the first thing and the most
important thing to consider when devising a
successful business strategy.
Organizational Stakeholders
A stakeholder is any group within or outside
the organization that has a stake in the
organization’s performance
- Each stakeholder has a different interest in
the organization
Customers
Community
Creditors
Government      decisions mostly reduced to the economic
Owners
Managers
Employees
Suppliers
An Organization’s Main Responsibilities
Economic - be profitable
Legal - obey the law
Ethical - do what is right
Discretionary - contribute to community &
quality of life
What Influences Ethical Behavior?
The Individual’s Role
A. Level one: Pre conventional - acts in own
best interest
- A few operate here
B. Level two: Conventional - upholds legal
laws
- Most people operate here
C. Level three: Principled - lives by own code
- Less than 20% reach level
three
The Organization’s Role
A. At best, most employees in firm operate at
level two
B. How will handle situation if no policies and
procedures?
Management’s Ethical Responsibilities
- Ethics is the code of moral principles and
values that govern the behaviors of a person or
a group with respect to what is right or wrong
- Ethics sets standards as to what is good or
bad in conduct and decision making
- Ethical behavior refers to treating others
fairly
- Most managers believe they are ethical in
the workplace, although, they might also agree
that there is still plenty of room for
improvement given the large number of
corporate scandals featuring in our news
streams. As a manager how much
consideration do you put into the ethics for any
given decision you make?  When you need to
decide what to do, are your choices made
around an ethical framework, or are your
concerns of business?  By explicitly making
ethics part of your organizational decision-
making, your company can enhance its
reputation and show that it cares about long-
term sustainability and corporate social
responsibility. 
What is an Ethical Dilemma?
- A situation in which each alternative choice
or behavior has some undesirable elements
due to potentially negative ethical or personal
consequences
- Moral dilemmas are thought-experiments,
imaginative scenarios used to argue
philosophical points.  They are often presented
in order to refute one or another system of
ethics; one may argue that if the dilemma is
unreasonable, the ethical system is
incomplete.
- However, the status of moral dilemmas has
become a major philosophical issue in its own
right.  Some philosophers argue that there are
no true moral dilemmas, others that they are
unavoidable and do not necessarily indicate a
flawed system of ethics.  Thus, moral
dilemmas are a way to explore the question of
what an ethical system must or must not be
expected to accomplish.
- For those who are not professional
philosophers, ethical dilemmas serve mainly as
a tool for exploring one’s own and others’
ethical values.  The question, “what would you
do?” in regards to a moral dilemma must, in
most cases, reveal one’s priorities – or provoke
one to determine those priorities.
- A lot of moral dilemmas revolve around
conflicts between teleological, or result-
oriented, ethics and deontological, or precept-
oriented, ethics.  This has also been
characterized as the conflict between what is
“right” (deontological) and what results in
“good” (teleological).  However, some of the
most difficult moral dilemmas do not revolve
around this conflict; moral dilemmas are more
difficult if symmetrical – if they require
choosing between two morally identical
options, such as in the choice to save only one
of two innocent lives.
Ethics in Dealing with Salespeople
Five ethical considerations faced by sales
managers
1. Level of sales pressure
2. Decisions affecting territory
3. To tell the truth?
4. The ill salesperson
5. Employee rights
Salespeople’s Ethics in Dealing with Their
Employers
A. Misusing company assets
B. Moonlighting
C. Cheating
D. Affecting other salespeople
E. Technology theft
Ethics in Dealing with Customers
Bribes
- defined by Black's Law Dictionary  reseller) also buys a certain amount of another
as the offering, giving, receiving, or soliciting of
any item of value to influence the actions of an
official, or another person, in charge of public
or legal duty.
- With regard to governmental operations,
essentially, bribery is "Corrupt solicitation,
acceptance, or transfer of value in
exchange for official action."
- Gifts of money or other items of value which
are otherwise available to everyone on an
equivalent basis, and not for dishonest
purposes, are not bribery.
- Offering a discount or a refund to all
purchasers is a legal rebate and is not bribery.
- For example, it is legal for an employee of a
Public Utilities Commission involved in electric
rate regulation to accept a rebate on electric
service that reduces their cost for electricity,
when the rebate is available to other residential
electric customers. However, giving a discount
specifically to that employee to influence them
to look favorably on the electric utility's rate
increase applications would be considered
bribery.
Misrepresentation
- is a false statement of a material fact made
by one party which affects the other party's
decision in agreeing to a contract.
- If the misrepresentation is discovered, the
contract can be declared void, and depending
on the situation, the adversely impacted party
may seek damages.
- In such a contract dispute, the party that
made the misrepresentation becomes the
defendant, and the aggrieved party is the
plaintiff.
Price discrimination
- is a selling strategy that charges customers
different prices for the same product or service
based on what the seller thinks they can get
the customer to agree to.
- In pure price discrimination, the seller
charges each customer the maximum price he
or she will pay. In more common forms of price
discrimination, the seller places customers in
groups based on certain attributes and charges
each group a different price.
Tie-in sales
- Marketing arrangement in which a supplier of
an in-demand good or service sells it on the
basis that the buyer (usually a retailer or
(less popular) product. Also called a tie in the
arrangement. See also full-line forcing.

Managing Sales Ethics

- Follow the organization’s leader

- Leader selection is important
- Establish a code of ethics
- Create ethical structures
- Encourage whistle-blowing
- Create an ethical sales climate
- Establish control systems

A strategy is a pattern of actions and resource

LESSON 3 allocations designed to achieve the goals of
the organization.
a.    Importance of Corporate Planning
 
b.    Marketing’s Importance in The Firm
c.     Essentials of A Firm’s Marketing Effort TACTICAL AND OPERATIONAL PLANNING
d.    Relationship Marketing - Tactical planning translates broad strategic
e.    Technology Builds Relationships and goals and plans into specific goals and plans
Partners relevant to a definite portion of the
organization.
f.      Relationship Marketing and The Sales
Force - Tactic is the operational means by which an
g.    Strategic Planning and The Sales organization intends to reach its objective.
Management Process
- Operational planning identifies the specific
procedures and processes required at lower
1. Explain the importance of Corporate levels of the organization.
Planning
 ESTABLISHING A MISSION AND VISION
2. Recognize Marketing’s Importance in the
firm Mission is the basic purpose and values of
3. Identify the relationship between marketing the organization, as well as its scope of
and the sales force  operations.

Introduction: Strategic vision provides a perspective on

where the company is headed and what the
Strategic planning helps an organization build organization can become.
long-term relationships with its customers. This
chapter will help you better understand: Strategic plan is the company’s mission,
values, objectives, strategies and tactics.
 IMPORTANCE OF CORPORATE PLANNING
STRATEGIC PLANNING Four key questions:
- Strategic planning involves making 1. Where are we?
decisions about the organization’s long-term
2. Where do we want to be?
goals and strategies.
3. How should we get there?
- Strategic goals are major targets or end 4. Can we afford it?
results that relate to the long-term survival,
value, and growth of the organization WHAT IS MARKETING?
Businesses have two major functions:
A. Production of goods or the creation of
services.
B. Marketing those goods and services.
Marketing is defined as the process of
planning and executing the conception, pricing,
promotion, and distribution of goods, services,
and ideas to create exchanges that satisfy
individual and organizational objectives.
Marketing people typically have these four
basic objectives to accomplish:
1. Maximize sales of existing products in
existing markets.
2. Develop and sell new products.
3. Develop new markets for existing or new
products.
4. Provide the quality of service necessary for
customers to be satisfied with their
transactions and to continue doing business
with the organization.
MARKETING’S IMPORTANCE TO THE FIRM
A. Marketing generates sales.
B. Marketing provides quality service.
ESSENTIALS OF A FIRM’S MARKETING
EFFORT
The essentials of a firm’s marketing effort
include its abilities
A. to determine the needs of its customers and
B. to create and maintain an effective
marketing mix that satisfies customer needs.
Marketing mix consists of four
elements:          
1. PRODUCT:
- A good is a physical object that can be
purchased.
- Service is an action or activity done for
others for a fee.
- Product refers to both goods and services.
SERVICES ARE PRODUCTS
They present their own selling challenges and
opportunities:
A. Intangibility– customers cannot sample.
B. Inseparability – cannot be separated from
the seller.
C. Heterogeneity – cannot standardize output.
D. Perishability and fluctuating demand
– highly perishable,
seasonal fluctuations.
E. A tough sell – most challenging sales
job.
2. PRICE: refers to the value or worth of a
product that attracts the buyer to exchange
money or something of value for it. 
3. DISTRIBUTION: (or place) refers to the
channel structure used to transfer products
from an organization to its customers.
There are three groups of customers:
Household – decision-making unit buying for
personal use.
Firm – an organization that produces goods
and services.
Government– an organization that has two
functions: the provision of goods and services
to households and firms and the redistribution
of income and wealth.
main
 4. PROMOTION: as part of the marketing mix,
increases company sales by communicating
product information to potential customers.
Four basic parts of a promotional effort:
1. Personal Selling
2. Advertising
3. Publicity
4. Sales
1. Personal selling
- Personal communication of information to
persuade a prospective customer to buy
something – a good, service, idea, or whatever
– that satisfies an individual’s needs.
2. Advertising – Non personal communication
of information paid for by an identified sponsor
such as an individual or an organization.
Modes of advertising include television, radio,
direct mail, catalogs, newspapers, and outdoor
advertising such as billboards.
3. Publicity- Non personal communication of
information that is not paid for by an individual
or organization. Information appears in media
such as television, radio, and newspaper.
4. Sales promotion - Involves activities or
materials used to create sales for goods or
services. The two types of sales promotion are
consumer and trade sales promotion.
Consumer sales promotion includes free
samples, coupons, contests, and
demonstrations to consumers. Trade sales
promotion encourages wholesalers and
retailers to purchase and to sell aggressively
using devices such as sales contests, displays,
special purchase prices, and free
merchandise.
THE GOAL OF A MARKETING MIX
The organization’s marketing group strives to
create a marketing mix for the right product, at
the right price, at the right time, and with the
right promotional effort.
RELATIONSHIP MARKETING
-Relationship marketing is the creation of
customer loyalty.
LEVELS OF RELATIONSHIP MARKETING
A. Transaction selling: Customers are sold to
and not contacted again.
B. Relationship selling: The seller contacts
customers after the purchase to determine if
they are satisfied and have future needs.
C. Partnering: The seller works continually to
improve its customers’ operations, sales, and
profits.
TECHNOLOGY BUILDS RELATIONSHIPS
AND PARTNERS
- Most dramatic force shaping an
organization’s marketing efforts today.
- Helps salespeople increase the speed with
which they can find leads, gather information,
reduce paperwork, and provide service.
- Technology is expensive
RELATIONSHIP MARKETING AND THE
SALES FORCE
These four basic questions are guidelines
that define the role of the sales force:
1. How much selling effort is necessary to gain
and hold customers?
2. Is the sales force the best marketing tool,
compared to advertising and other sales
promotion methods, in terms of cost and
results?
3. What type of sales activities – for example,
technical assistance and frequent or infrequent
sales calls – will be necessary?
4. Can the firm gain strength relative to its
competition with its sales force?
PERSONAL SELLING BUILDS
RELATIONSHIPS
- Salespeople generate revenue
- Salespeople provide service. Service quality
is a subjective assessment that customers
arrive at by evaluating the service level that
they perceive being delivered.
- Salespeople implement relationship
marketing.
STRATEGIC PLANNING AND THE SALES
MANAGEMENT PROCESS
PLANNING A SALES STRATEGY THE
DEVELOPMENT OF SALES STRATEGIES
1. A clear picture of the present situation.
2. Well-defined strategies covering every major
aspect of the selling units or departments.
3. Income and expense budgets and profit
plan.
A sales strategic plan includes the
following four major questions:
1. What is the sales department’s present
condition?
2. What trends are apparent?
3. What are the most important objectives?
4. What are the strategies for getting these
objectives accomplished?
SETTING NEXT YEAR’S SALES PLAN
- The salesforce may have objectives
measured on the basis of the following:
- Contribution to profits.
- Return on assets (ROA) managed by the
sales force.
- Sales/cost ratio.
- Market share
THE BOTTOM LINE
Strategic planning involves making decisions
about an organization’s long-term goals and
strategies. Most people today associate
marketing with selling. This marketing concept
evolved over the years, developing as
American businesses matured. The marketing
mix consists of four variables: product, price,
distribution, and promotion. Firms must
carefully consider the role of the sales force in
their promotional program or promotional
aspect of the marketing mix.
LESSON 4
Introduction:
Strategic planning - helps an organization
build long-term relationships with its
customers. This chapter will help you better
understand:
IMPORTANCE OF CORPORATE PLANNING
STRATEGIC PLANNING
- involves making decisions about the
organization’s long-terms goals and strategies.
STRATEGIC GOALS
- are major targets or end results that relate to
the long-term survival, value, and growth of the
organization
THE STRATEGIC MANAGEMENT PROCESS
The essence of strategic planning is to ask
“Where are we now as a business, where do
we want to be, and how should we get there?”
The entire 7-step strategic management
process follows:
Step 1: Define the Current Business
Every company must choose the terrain on
which it will compete - in particular, what
products it will sell, where it will sell them, and
how its products or services will differ from its
competitors’. The company’s vision is “what we
want to become”, usually longer term, broader
images.
Mission states to “who we are, what we do,
and where we’re headed.”
Step 2: Perform External and Internal
Audits
To facilitate strategic external/internal audit,
many managers use SWOT analysis to
compile ad organize the process of identifying
company Strength, Weaknesses,
Opportunities, and Threats
Step 3: Formulate New Business and
Mission Statements
Step 4: Translate the Mission into Strategic
Goals
Step 5: Formulate Strategies to Achieve the
Strategic Goals
Step 6: Implement the Strategies
Strategy implementation means translating
the strategies into actions and results- by
actually hiring (or firing) people, building (or
closing) plants, and adding (or eliminating)
products and product lines
Step 7: Evaluate Performance
Managing strategy is an ongoing process.
Strategic control keeps the company’s strategy
up to date. It is the process of assessing
progress toward strategic goals and taking
corrective action as needed.
Types of Strategies
Three types of strategic planning: corporate
strategy, competitive strategy, and functional
strategy.
Corporate Strategy
Corporate-level strategy identifies the portfolio
of business. There are several generic
possibilities:
- A diversification corporate strategy
implies that the firm will expand by adding
new product lines.
- A vertical integration strategy means
the firm expands by, perhaps, producing its
own raw materials, or selling its products
direct.
- Consolidation - reducing the company’s
size
- Geographic expansion - for instance,
taking the business abroad
Competitive Strategy
We can define competitive advantages as any
factor that allow a company to differentiate its
product or service from those of its competitors
to increase market share to achieve
competitive advantage:
- Cost leadership means the enterprise
aims to become the low-cost leader in an
industry
- Differentiate - a firm seeks to be unique
in its industry along dimensions that are
widely valued by buyers.
- Focusers carve out a market niche, and
compete by providing a product or service
customers can get in no other way
Functional Strategy
Functional strategies identify the basic courses
of action that each department will pursue in
order to help the business attain its competitive
goals.
Achieving strategic fit
There are two possibilities:
- Fit their capabilities to the opportunities
and threats
- Leverage resources - supplementing
what you have and doing more with what
you have
Human resource management system
- HR Management
- Payroll Management
- Recruitment Management
- Training Management
- Insurance Management
- Performance Management
- Organization Change Management
- Policies & Forms Publishing
- Organization Survey Management
- Employee Suggestion Management
- News Letters/ Opinion Polls & Events
- Employee and Manager Self Service (ESS &
MSS)
Human Resource Management’s Role in
Creating Advantage
According to the production expert from
Harvard University
Operational flexibility is determined
primarily by a plant’s operators and the extent
to which managers cultivate, measure, and
communicate with them. Equipment and
computer integration are secondary.
Toyota Small teams of carefully selected and
highly trained assembly workers inspecting
and assessing their own work, selecting their
own team members, interacting with engineers
and suppliers to improve components, meeting
with the plant’s top managers, and spending
several week each year being trained.
Strategic Human Resource Management
It means formulating and executing human
resource policies and practices that produce
the employee competencies and behaviours
the company needs to achieve its strategic
aims.
Southwest Airlines
An HR strategy built on high compensation,
flexible job assignments, cross training, and
employee stock ownership. We can outline this
as follows:
1. High compensation, flexible work
assignments, and so forth, lead to
2. motivated flexible ground crews and
employees who do whatever it takes to
3. turn the planes around in 15 minutes, so
that
4. Southwest achieves its strategic aims of
delivering low-cost, convenient service.
Dell
The essence of Dell’s competitive strategy has
always been to be low-cost leader. Dell
delivers most of its human resource services
via the Web. Dell’s intranet contains about 30
automated Web applications (including
executive search reports, hiring tools, and
automated employee referrals)
Strategic Human Resource Challenges
Today’s HR managers face three basic
strategies challenges:
- One is the need to support corporate
productivity and performance improvement
efforts
- Second, employees play an expanded
role in employers’ performance
improvement efforts
- The third challenge is that employers see
that their human resource units must be
more involved in designing - not just
executing - the company’s strategic plan.
Human Resource Management’s Strategic
Roles
HR managers can play two basic strategic
planning roles, in strategy execution and in
strategy formulation.
The Strategy Execution Role (traditional
role)
- HR managers designs strategies,
policies, and practices that make sense in
terms of t he company’s corporate and
competitive strategies
The Strategy Formulation Role
(expanded role)
- HR manager need work with top
management to formulate the company’s
strategic plans
CREATE THE STRATEGIC HUMAN
RESOURCE MANAGEMENT SYSTEM
Focus on three main components:
The HR function: HR professionals with
strategic management competencies
The HR system: High Performance Work
System (HPWS) consisting of strategically
aligned HR policies, practices and activities
Employee behaviors: Employee
competencies, values, motivation, and
behaviours required by the company’s
strategic plan.
The High-Performance Work System
High-performance systems (HPWS) are a
group of separate but interconnected human
resource (HR) practices - e.g selection,
training, performance appraisal, and
compensation - designed to enhance
employee effectiveness. Employees should
have better skills, more motivation, and more
opportunities to excel when these high
performance HR practices are aligned and
working in harmony.
Multi-skilled work teams: empowered front-
line workers; extensive training; labor
management cooperation; commitment to
quality; and customer satisfaction.
Seven Practice of High Performance Work
Systems (HPWS)
1. Ensuring Employee Security
Despite the trend of many businesses to
engage in downsizing and hiring part-time and
contract employees to avoid creating
obligations to employees, the evidence has
shown that organizations who engage in these
practices have rarely created new wealth or
improved the long-term bottom line of their
organizations. HPWS systems advocate
creating high-trust partnerships with
employees that build commitment and promote
extra-mile and extra-role behavior that are
critical for success in the modern organization
2. Selective Hiring
Carefully evaluating new hires requires that
organizations are precise in identifying the
critical skills and attributes or their employees
in the first place. Hiring to fit requirements of
the job makes more sense than simply hiring
candidates with the best academic pedigrees
or who look the best on paper, identifying
attributes like character, respect for others, and
a service orientation that do not change
through training actually improve employee
retention and long-term fit.
3. Decentralized Decision-Making
Organizations that establish HPWS cultures
recognize the importance of clearly identifying
goals objectives. In implementing those goals,
HPWS companies delegate decision-making
throughout the organization and empower their
employees to deliver outstanding service to
customers and achieve optimal organization
results. Incorporating well-trained and
supported self-managed teams that enjoy
autonomy and broad discretion in making
decisions demonstrates the high trust in
employees that characterizes HPWS.
4. High Result-Based Compensation
Developing a compensation system that
rewards employees at all when the
organization succeeds promotes commitment
to shared goals ad increases employee
awareness of their roles in contributing to
profitability. Compensating employees
contingent upon organization performance is
most effectively adopted as part of a high-
performance culture that incorporates profits
sharing throughout an organization. The logic
of contingent compensation is implicitly
equitable and fair and confirms to employees
that they will share in the fruits of their work.
Group-based profit sharing or gain sharing also
creates a social system of accountability to the
organization and to other team members.
5. Training by Commitment
Virtually every HPWS organization emphasizes
training by commitment as contrasted with
training focused on control-oriented
management systems. Training employees in
how to resolve problems, to take responsibility
for quality, and to take the initiative in
suggesting changes in organization work
methods demonstrates trust in the quality of
employees hired and an acknowledgement of
employee buy-in to a result-based
compensation program. In contrast with many
organizations that deem training to be a frill
that can be eliminated. HPWS systems
carefully determine the type of training that is
most needed to achieve organizational goals
and then invest heavily on helping employees
to optimize their ability to succeed. Research
evidence suggest that engaging employees in
work-related team training increase their
ownership and commitment and their ability to
contribute to the achievement to of critical
organizational goals.
6. Reduced Status Barriers
A basic assumption of an HPWS is that good
ideas and organizational improvements can
come from employees at all levels of the
organization. Wage inequality and the use of
symbols like language, dress, physical space,
and benefits can send a message to
employees that an organization views status
hierarchically, rather than treating every
employees as if he or she is both valued and
valuable. Stephen R. Covey repeatedly noted
that great organizations seek to build high trust
cultures by nurturing and developing people,
rather than by controlling them. Treating
employees like values partners by reducing
status barriers, by empowering employees,
and by treating employees with dignity and
respect build trust and commitment.
7. Sharing Key Information
The sharing of financial, strategic, and
performance in formation conveys to
employees that they are trusted partners who
can utilize this important information to assist
their organization to achieve its goals. Highly
motivated and well-trained employees need
information to be able to contribute to their
organization’s success. Sharing information
and providing the training in how to use it to
achieve goals makes implicit sense, yet many
traditional organizations refuse to do either and
pay the price in lost opportunities and reduced
trust.
Sample HR practices
A.
Recruiting - Number of qualified application per - Develop detailed HR scorecard measures.
position “How can HR measure whether it is executing
Percentage hired based on validated selection well for the business, in terms of producing the
test required workforce competencies and
behaviors?”
B.
Percentage of jobs filled from within SUMMARY
Percentage in a format HR plan including In formulating their human resources
recruitment, development and succession strategies, HR managers must address
three basic challenges:
C. - the need to support corporate productivity
Number of hours of training for new and performance improvement efforts
employees(less than 1 year) - the fact that employees play an expanded
Number of hours of training for experience role in the employer’s performance
employees improvement efforts
- the fact that HR must be more involved in
D. designing- not just executing- the company’s
Percentage of employees receiving a regular strategic plan.
performance appraisal
Percentage of the workforce eligible for There are seven basic steps in the strategic
incentive pay management process:
- Define the business and its mission
E. - Perform an external and internal audit
Number of employees per HR professionals - Formulate new business and mission
Percentage of the eligible workforce covered statements
by a union contract - Translate the mission into strategic goals
- Formulate a strategy to achieve the strategic
goals
- Implement the strategy
Firm Performance - Evaluate performance
Employee turnover
Sales per employee
Market value to book value

Measuring HR’s Effectiveness There are three main types of strategic

- Such as revenue and income per full-time plans.
equivalent employee, average full-time The company’s corporate-level strategy
employees overtime, the level of turnover and identifies the portfolio of businesses that in
its associated costs, and overall human total comprise the company and includes
resource expenses - diversification
- Translating Strategy into Human Resource - vertical integration
Policy and Practice - consolidation
- geographic expansion
Basic Model of How to Align Strategy and Each business needs a business
Actions with Business Strategy level/competitive strategy
- Formulate business strategy. “What are the - Differentiation
strategic goals of the business?” - Cost leadership
- Identify workforce requirements, “What Finally, each individual business is composed
employee competencies and behaviors must of departments that require functional
HR deliver to enable the business to reach its strategies. The latter identify the basic courses
goals?” of action each department will pursue in order
- Formulate HR strategic policies and activities. to help the business attain its strategic goals.
“Which HR strategies and practices will
produce these employee competencies and A strategy is a course of action. It shows how
behaviors?” the enterprise will move form the business it is
in now to the business it wants to be in, given
its opportunities and threats and its internal
strengths and weaknesses. Strategic human
resource management means formulating and
executing HR system that produce the
employee competencies and behaviors the
company requires to achieve its strategic aims.
The high-performance work system is
designed to maximize the overall quality of
human capital throughout the organization, and
provides a set of benchmarks against which
today’s HR manager can compare the
structure, content, and efficiency and
effectiveness of his or her human resources
system.
The basic process of aligning human
resources strategies and actions with
business strategy entails four steps:
- Formulate the business strategy
- Identify the workforce(employee) behaviors
needed to produce the outcomes that will help
the company achieve its strategic goals
- Formulate human resources strategic policies
and actions to produce these employee
behaviors
- Develop measures (metrics) to evaluate the
human resources department’s performance
The HR Scorecard process for creating a
strategy-oriented human resources system,
includes ten steps:
1. Define the business strategy
2. Outline the company’s value chain
3. Outline a strategy map
4. Identify the strategically required
Organizational
organizational outcome
5. Identify the required workforce a
competencies and behaviors
6. Identify the strategically relevant human
resources system policies and activities
7. Create HR Scorecard
8. Design the HR Scorecard measurement
system
9. Summarize the Scorecard measures in a
digital dashboard
10. Periodically evaluate the measurement
system
The HR Scorecard is a concise measurement
system that shows the quantitative standards
the firm uses to measure human resources
activities, to measure the employee behaviors
resulting from these activities, and to measure
the strategically relevant organizational
outcomes of those employee behaviors.
HR SCORECARD
What is an HR Scorecard?
The HR Scorecard is a concise measurement
system, often summarized on a computer
screen in a “digital dashboard”, it shows the
quantitative standards or “metrics” the firm use
to measure HR activities, and to measure the
employee behaviors resulting from these
activities, and to measure the strategically
relevant organizational outcomes of those
employee behaviors.
Information for Creating an HR Scorecard
To create an HR Scorecard, the manager
needs three types of information:
- what the company’s strategy
- HR scorecard relationships
- metrics to measure all the activities and
results involved
The Basic HR Scorecard Relationships
HR activities
→Emergent
Achieve
performance
Strategically
strategic employee
relevant behavior outcome
goals organization
Establishing Human Resource Information
Systems (HRIS)
Why an HRIS
Larger companies typically integrate their
separate HR systems into ingrated human
resource information systems (HRIS). There
are at least three reasons for installing such a
system.
- First is competitiveness; an HRIS can
significantly improve the efficiency of the HR
operation and therefore a company’s bottom
line.
- The HRIS can also bump the firm up to a
new plateau in terms of the number and variety
of HR-related reports it can produce.
- Finally, the HRIS can also help shift HR’s
attention from transactions-processing to
strategic HR.

HRIS Action
Now, company’s are moving from component
systems (less than 1500 employees to
integrated human resource information
systems(larger firms). The advantages are as
the following:
- Improved Transaction Processing
- Online Processing
- improved Reporting Capability

END………………………………………..
GODBLESS AND GOOD LUCK! FIGHTING!