Sales Management

Lecture 1. Place of sales management in marketing

Part 1
Anastasii I. Klimin. PhD in Econ. Sc., Assistant Professor
Aleksei Trykov, Assistant lecturer
Peter the Great St. Petersburg Polytechnic University (SPbPU), Institute of Industrial Management, Economics
and Trade (IIMET), Graduate School of Management and Business (GSMB)

2019
 Contents

1.1. Marketing mix and Communication mix.

1.2. Factors determining the leading role of personal sales in the.
marketing mix.
1.3. Buying and selling processes.
1.4. Sales management and salespeople functions.
1.1. Marketing mix and Communication mix.
 Definition of marketing

§ Marketing is the activity, set of institutions, and

processes for creating, communicating,
delivering, and exchanging offerings that have
value for customers, clients, partners, and
society at large.

American Marketing Association

 Marketing mix
E. Jerome McCarthy ”4P” (1960)

Marketing mix

Product Place
Product variety Channels
Quality Coverage
Design Assortments
Features Locations
Brand name Inventory
Packaging Price Promotion Transport
Sizes List price Sales promotion
Services Discounts Advertising
Warranties Allowances Sales force
Returns Payment period Public relations
Credit terms Direct marketing
Robert F. Lauterborn “4C” (1993)

4P (seller) 4C (buyer)
(E. Jerome McCarthy, 1960) (Robert F. Lauterborn, 1993)

Product Customer solution

Place Convenience

Price Customer cost

Promotion Communication
 Holistic marketing

Senior Other Products &

Marketing management services
department departments
Communications Channels

Internal Integrated
marketing marketing

Holistic
marketing

Sales
revenue Performance Relationship
marketing marketing
Brand &
customer equity Community
Customers Partners
Ethics Legal Channel
Environment
Philip Kotler, Kevin Lane Keller. Marketing management 14th ed., 2012 – 812 p. – p.19
 Common Communication Platforms
Advertising Sales Events and Public Relations Direct and Word-of- Personal
Promotion experiences and Publicity Interactive Mouth Selling
Marketing Marketing
Print and Contests, Sports Press kits Catalogs Person-to- Sales
broadcast ads games, Entertainment Speeches Mailings person presentations
Packaging- sweepstakes, Chat rooms Sales
lotteries Festivals Seminars Telemarketing
outer Blogs meetings
Premiums and Arts Annual reports Electronic
Packaging shopping Incentive
gifts Causes Charitable
inserts programs
Sampling Factory tours donations TV shopping
Cinema Samples
Fairs and trade Company Publications Fax
Brochures and Fairs and
booklets shows museums Community E-mail trade shows
Exhibits Street activities relations Voice mail
Posters and
Lobbying Company blogs
leaflets Demonstrations
Directories Coupons Identity media Web sites
Reprints of ads Rebates Company
magazine
Billboards Low-interest
Display sings financing

Point-of- Trade-in
purchase allowances
displays Continuity
DVDs programs
Tie-ins
Kotler, Keller - Marketing Management , 14th Edition, 2012
 Marketing communication

Promotion – means “one-way” process

“seller => buyer”

Seller Buyer

Communication – means “two-way” process

“seller <=> buyer”

Seller Buyer

feedback
Communication mix. Classic tools

Sales,
personal Advertising
selling

Public Sales
relations promotion
 Definition of “sales” or “selling”

§ Sales, personal selling - the commercial

activity of firm's trading personnel or agents,
connected with presentation of the goods to
one or several buyers for the purpose of sale.
 Definition of “sales”

§ Types of presentation – oral,

written, visual
§ Ways of communication –
conversation, phone,
Internet
§ Tools of presentation –
speech, pictures, schemes,
drawings, the goods "in a
cut“
 Communication mix
Contemporary additional tools

Word-of-
Direct
mouth
marketing
marketing

Events and Interactive

experiences marketing

Kotler, Keller - Marketing Management , 14th Edition, 2012

1.2. Factors determining the leading role of personal sales
in the marketing mix
 When personal selling is more important than advertising?

§ B2B market buyers

§ Few buyers
§ Buyers concentrated geographically
§ Large sum of purchase
§ Purchase is at the stage of completion (signing
a contract, “closing“)
§ Consumer need detailed, complex information
about product
§ Long and complicated purchasing process
§ Product is a service (not goods)
 Business to business (B2B) and business to consumer (B2C)
marketing

B2C markets
Consumer markets are markets where the distinguishing characteristic is that
the customer is purchasing products and services their own or their family’s use.

B2B markets
Customers – business organizations (commercial). Are characterised by often
large and powerful buyers, purchasing predominantly for the furtherance of

MARKETS OF THE
ORGANIZATIONS
organisational objectives and in an organisational context using
skilled/professional buyers. B2S, B2T (shops, trade) – clients are the trade
organisations.
B2G (government) markets
Customers – state organizations, have restricted budget and special legislation
rules for purchasing: tenders, budgeting …
B2I (Institutions) markets
Customers – non-government non-commercial private organizations, have
restricted budget and founders' rules for purchasing
 Retail

§ Retail is the sale of goods and services to the end-user in small

quantities to the consumer. Retailing can be done in either fixed
locations like stores or markets, door-to-door or by delivery.
§ The term "retailer" is also applied where a service provider services
the needs of a large number of individuals.
§ Online retailing (electronic commerce) and mail order are forms of
non-shop retailing.
§ Retail comes from the Old French word tailler, which means "to cut
off, clip, pare, divide" in terms of tailoring (1365). It was first
recorded as a noun with the meaning of a "sale in small quantities"
in 1433 (from the Middle French retail, "piece cut off, shred, scrap,
paring").

http://en.wikipedia.org/wiki/Retail
 What to choose?

Business Consumer
Target Personal Selling-Driven Marketing Target Advertising-Driven
Communications Strategies Marketing Communications
Markets Markets Strategies

Characteristics Characteristics
•Few Buyers •Many Buyers
•Buyers Concentrated Geographically •Buyers Dispersed Geographically
•Purchase Information Needs High •Purchase Information Needs Low
•Purchases Made in Large Amounts •Purchases Made in Small Amounts
•High-Importance Purchases •Low-Importance Purchases
•Complex Products Purchased •Low-Complexity Products Purchased
•Postpurchase Service Important •Postpurchase Service Not Important

Personal selling-driven marketing communications strategies are

most appropriate for target markets that have characteristics
typical of business markets.
Sales Management: Analysis and Decision Making, Sixth Edition Thomas N. Ingram, Raymond W. LaForge, Ramon A. Avila, Charles H. Schwepker, Jr., Michael R.
Williams. 2006
 What to choose?

Personal
Selling-Driven Marketing Communication
Strategies

When Message Flexibility Is Important

When Message Timing Is Important
When Reaction Speed Is Important
When Message Credibility Is Important
When Trying to Close the Sale

When Low Cost per Contract Is Important

When Repetitive Contact Is Important
When Control of Message Is Important
When Audience Is Large

Advertising-Driven
Marketing Communication Strategies
Sales Management: Analysis and Decision Making, Sixth Edition Thomas N. Ingram, Raymond W.
LaForge, Ramon A. Avila, Charles H. Schwepker, Jr., Michael R. Williams. 2006
 Types of Organizations

Major Category Types Example

Business or industrial
organizations
Government organizations
Users – purchase products and IBM purchasing facsimile
services to produce other products machines from Sharp for their
and services corporate offices
Original equipment IBM purchasing microcomputer
manufacturers (OEM) – purchase chips from Intel to incorporate into
products to incorporate into their personal computers
products Businessland purchasing IBM
Resellers – purchase products to personal computers to sell to
sell organizations
Federal, state and local Virginia State Lottery purchasing
government agencies IBM personal computers for
managers

Institutions Public and private institutions United Way purchasing IBM

personal computers for their offices

Sales Management: Analysis and Decision Making, Sixth Edition Thomas N. Ingram, Raymond W. LaForge,
Ramon A. Avila, Charles H. Schwepker, Jr., Michael R. Williams. 2006
 B2B Buying Situations

§ A straight rebuy buying situation, wherein the account has

considerable experience in using the product and is satisfied
with the current purchase arrangements. In this case, the
buyer is merely reordering from the current supplier and
engaging in routinized response behavior.

§ A modified rebuy buying situation exists when the account

has previously purchased and used the product. The decision-
making process in this type of situation is often referred to as
limited problem solving.

§ A new task buying situation, in which the organization is

purchasing a product for the first time, poses the most
problems for the buyer. The decision-making process in this
type of situation is often called extensive problem solving.
 22

Buying Center
(decision making unit –
DMU)

§ initiators, who start the organizational purchasing

process
§ users, who use the product to be purchased
§ gatekeepers, who control the flow of information from
seller and between buying center members
§ influencers, who provide input for the purchasing
decision
§ deciders, who make the final purchase decision
§ purchasers, who implement the purchasing decision
 Team selling and Buying Centers

Selling Firm Buying Firm

Organizational
Sales team Exchange Purchasing
Salesperson Buying Center
Processes Agent

Marketing Information Purchasing

Sales
Problem Solving
Manufacturing Negotiation Manufacturing
R and D Friendship, Trust R and D
Engineering Product/Services Engineering

Payment
Physical Reciprocity Marketing
Distribution
The salesperson coordinates the activities of a sales team to interact with members of an account’s buying
center. The size, composition and activities of the sales team depend on the buying situation faced by the seller.

Sales Management: Analysis and Decision Making, Sixth Edition Thomas N. Ingram, Raymond W. LaForge, Ramon A. Avila, Charles H. Schwepker, Jr., Michael R. Williams. 2006
 The types of Decision Makers on B2B markets

BDM TDM
Business Technical
decision decision
makers makers

Decision:
Money
Quality
 Purchasing computers for an advertising agency

Employee Buying Center Type of Decision

Participant Maker
Designer Initiator, User Technical
System Influencer Technical
administrator
Financial director Decider Business
Purchasing Purchaser Business
manager
Thank you for your attention!

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