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The selling process

contact, enhance service and operate more efficiently. Telemarketing is one route to
consider and use of the Internet has already proved a powerful information vehicle but in
most cases as a supplement to personal selling rather than its replacement. Although there
are some examples of direct marketing and telephone marketing being highly effective,
these have so far been confined to limited areas, mostly service businesses. Sales managers
must welcome new ways of communicating effectively with customers at lower cost but
ensure their sales operation meets the needs of both company and customer.

Questions
1 According to reports 60–70 per cent of CRM projects, including sales automation systems, fail as
perceived by the companies that use them. By considering the principle causes of such failure what
recommendations can you make to avoid this occurrence?
2 Choosing your own example explain how a close customer–supplier relationship differs from
a transactional one. Focus particularly on the information that you need to develop and maintain
a close long-term profitable relationship.
3 It has been argued that the corner shopkeeper has greater and better knowledge of her customers
than the CRM manager with expensive software and databases at her disposal. State whether you
agree or disagree with this statement, giving possible reasons and indicate the areas where information
may be lacking.
4 Your sales director has asked to make a case for reducing personal face-to-face visits in favour of
greater telephone contact. Submit a report outlining your views.
5 From a buyer’s perspective consider the merits of eCommerce, particularly on-line auctions. What
precautions would you take to ensure that they worked in your firm’s interests?

Case study Agere Systems

Agere Systems (www.agere.com) is a semiconductor company that was a spin-off from
Lucent Technologies, itself a spin-off from AT&T/Bell Laboratories. It is therefore by tradition
a product-oriented business. The semiconductor industry is a cyclical one subject to economic
fluctuations and is characterised by rapid product innovation and obsolescence, evolving
standards, rapid price erosion and dramatic changes in end-customer demand for products
such as mobile phones, digital cameras, computer related products of all types and other
electronic products. For any semiconductor company end-customers would be, for example,
hard drive suppliers such as Seagate; PC suppliers such as Dell and HP; mobile phone
companies like Nokia and Samsung; networking equipment such as Cisco and Huawei;
telecommunications including Ericsson and Nortel.
Agere has a worldwide sales organisation with approximately 300 employees with 8 US sales
offices and 14 outside the United States. Most sales, around 90 per cent of revenues, are
direct sales approached in one of three ways:
1 Key account selling – two companies account for roughly 25 per cent or revenue, but no
other customers account for more than 10 per cent of sales. These two companies are
managed as key accounts.

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6 ■ Technology and sales

2 System or team selling – Sales, marketing and technical personnel work with customers
primarily to achieve a design solution. Therefore this is a classic organisational buying
situation involving the purchasing manager finance, production and various technical
support staff comprising the decision-making unit (DMU).
3 Industrial direct – where the end customers, typically, would conduct a competitive
process of supplier and component selection. To win the design technical sales consultants
need to work with the customer’s product design team to demonstrate Agere’s ability to
solve the customer’s problem. Where necessary the salesperson may require the help of
a team depending on the contract being sought.
The sales approach is one where the emphasis is on a design solution, seeking to add value
by working with customers in joint cost reduction, joint product development and multiple
interaction between personnel of both companies. A quality focus, high levels of customer
service and the need to retain customers are all vital in this business. Even with this commit-
ment to customers and technology the industry is highly competitive. To sustain and win
business Agere must change and develop their sales operations.
Consider your solution in three different areas:
1 What objectives should be set for improving information in the sales process with what
purpose?
2 How can the market be segmented so that different sales approaches can be used for
different customer groups?
3 What initiatives should be pursued to establish an online presence for sales in this sector?

Key terms
■ customer relationship management
■ database marketing
■ electronic commerce
■ Internet
■ sales force automation
■ sales information system
■ telemarketing

References
AMR Research Available at: http://www.amr.com [Accessed 24 July 2006]
Bose, R. (2002) ‘Customer relationship management: key components for IT success’ Journal of
Industrial Management and Data Systems 102 (2): 89–97
Bovet, D., Toy, P. and Kochersperger, G. (2003) ‘Why senior executives should care about sourcing’
Mercer Management Journal 16 (Nov): 32–41
Brown, S.A. (2000) Customer Relationship Management John Wiley and Sons: Ontario
Burns, T. and Stalker, G.M. (1961) The Management of Innovation Tavistock Publications: London
DeVincentis, J.R. and Rackham, N. (1998) ‘Breadth of a Salesman’ The McKinsey Quarterly
no. 4: 32–43
Donaldson, B. and Resch, G. (2006) ‘Why it is too soon to kill off the salesperson: some limitations
with electronic reverse auctions’ Proceedings of the Academy of Marketing Middlesex
University: London

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