Chap017 -Personal Selling

(1)

I n t e r n a t i o n a l M a r k e t i n g

Personal Selling

and

Sales Management

Chapter 17

1 4 t h E d i t i o n P h i l i p R. C a t e o r a M a r y C. G i l l y J o h n L . G r a h a m

McGraw-Hill/Irwin

International Marketing

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What Should You Learn?

• The role of interpersonal selling in international marketing

• The considerations in designing an international sales force

• The steps to recruiting three types of international sales people

(3)

17-3

What Should You Learn?

• The special training needs of international personnel

• Motivation techniques for international sales representatives

• How to design compensation systems for an international sales force

• _{How to prepare Americans for foreign assignments} • The changing profile of the global sales and

(4)

Global Perspective

International Assignments are Glamorous, Right?

Global Perspective

International Assignments are Glamorous, Right? • Job security

• Adjustment to other cultures

• Readjustment upon return to U.S.

(5)

17-5

Designing the Sales Force

• Relationship marketing and customer relationship management

• Decisions must be made regarding the numbers, characteristics, and assignments of sales

personnel

• Different market requirements regarding direct sales and customer approach

(6)

Recruiting Marketing

and Sales Personnel

Recruiting Marketing

and Sales Personnel

• The largest personnel requirement abroad for most companies is the sales force

• Expatriates

– Numbers are declining

– Important for highly technical or involved products – High cost

– Cultural and legal barriers

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17-7

Recruiting Marketing

and Sales Personnel

Recruiting Marketing

and Sales Personnel

• Local nationals

– Transcend both cultural and legal barriers

– Familiar with distribution systems and referral networks – Headquarters personnel may ignore their advice

– Lack of availability

– Sales positions viewed negatively • Third-country nationals

– Expatriates working for a foreign company • Host-country nationals

(8)

The 20 Most Expensive Cities

to Live on the Planet

(in order)

The 20 Most Expensive Cities

to Live on the Planet

(in order)

(9)

17-9

Selecting Sales

and Marketing Personnel

Selecting Sales

and Marketing Personnel

• Management must define precisely what is expected of people

• _{Prime requisites}

– Maturity

– Emotional stability – Breadth of knowledge – Positive outlook

– Flexibility

– Cultural empathy

– Energetic and enjoy travel

• Mistakes can be costly

(10)

Training for International Marketing

• The nature of the training program depends on:

– The home culture of the sales person

– The culture of the business system and foreign market

• Continual training is important in foreign markets

• Companies should provide home-office personnel with cross-cultural training

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17-11

Personal Selling Tips

from Brussels to Bangkok

Personal Selling Tips

from Brussels to Bangkok

(12)

Motivating Sales Personnel

• National differences must always be considered when motivating the marketing force

• Individual incentives that work effectively in the U.S. can fail completely in other cultures

• Communications are important in maintaining high levels of motivation

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17-13

Salespeople’s Distribution

of 100 Points among Rewards in Terms of Their Importance

Salespeople’s Distribution

of 100 Points among Rewards in Terms of Their Importance

(14)

Designing Compensation

Systems for Expatriates

Designing Compensation

Systems for Expatriates

• Fringe benefits

• Compensations comparisons between the home office and abroad

• Short-term assignment compensation

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17-15

Global Similarity

(16)

A Compensation Blueprint

(17)

17-17

Designing Compensation Systems

for a Global Sales Force

• Involve representatives from key countries

• Allow local managers to decide the mix between base and incentive pay

• Use consistent performance measures (results paid for) and emphasis on each measure

• Allow local countries flexibility in implementations

(18)

Designing Compensation Systems

• Don’t design the plan centrally and dictate to local offices

• Don’t create a similar framework for jobs with different responsibilities

• Don’t require consistency on every performance measure within the incentive plan

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17-19

Evaluating and Controlling

Sales Representatives

Evaluating and Controlling

Sales Representatives

• _{In the U.S., emphasis is placed on individual}

performance

– Which can easily be measured by sales revenues generated • _{In many countries evaluation is more complex}

– Where teamwork is favored over individual effort • _{In U.S.}

– Primary control tool used by sales managers is the incentive system

• _{In other countries}

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Preparing U.S. Personnel

for Foreign Assignments

Preparing U.S. Personnel

for Foreign Assignments

• Cost of foreign assignments

– Typically from 150-400 percent of the annual base salary

– Cost increases if the expatriate returns home before completing the scheduled assignment

• The planning process

– Must begin prior to the selection of those going abroad

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17-21

Overcoming Reluctance

to Accept a Foreign Assignment

Overcoming Reluctance

to Accept a Foreign Assignment

• Concerns for career

– An absence will adversely affect opportunities for advancement • Concerns for family

– Education of the children

– Isolation from family and friends – Proper health care

– The potential for violence

(22)

Reducing the Rate of Early Returns

• Evaluation of an employee’s family

– 75 percent of families sent abroad experience adjustment problems with children or marital discord

• Cross-cultural training for families as well as the employee

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17-23

Successful Expatriate Repatriation

• Commit to reassigning expatriates to meaningful positions

• Create a mentor program

• Offer a written job guarantee stating what company is obligated to do for returning expatriate

• Keep the expatriate in touch with headquarters through periodic briefings and headquarter visits

(24)

Developing Cultural Awareness

• Expatriate failures

– Caused by lack of an understanding of cultural differences and their effect on management skills

• Cultural skills

– Can be learned and developed

– Provide the individual with the ability to relate to a different

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17-25

The Changing Profile

of the Global Manager

The Changing Profile

of the Global Manager

• Fewer companies today limit their search

for senior-level executive talent to their home countries

• _{Some companies believe}

– It is important to have international assignments early in a person’s career

– International training is an integral part of their entry-level development programs

(26)

Foreign-Language Skills

• Many believe:

– Learning a language improves cultural understanding and business relationships

– To be taken seriously in the business community, the expatriate must be at least conversational in the host language

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17-27

Summary

• The company’s sales force is on the front line of a marketing organization

• The role of marketers in both domestic and foreign markets along with the composition of international managerial and sales forces is rapidly changing

• The recent emphasis on using local personnel operating in their own lands has highlighted the importance of adapting U.S. managerial

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Summary

• The development of an effective marketing organization calls for careful recruiting,

selecting, training, motivating, and compensating of expatriate personnel and their families

• The most practical method of maintaining an

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THE KEY ROLES OF SALESPEOPLE

1. THE SELLING FUNCTION

2. MANAGE CUSTOMER RELATIONSHIPS

3. GATHER INFORMATION

•

From Customers

•

From Competitors

•

About Market Forces

(30)

SALES ROLE IN THE ORGANIZATION

• MANAGE RELATIONSHIPS

– CREATE CUSTOMERS FOR LIFE – PROVIDE CUSTOMER SERVICE

– COORDINATE CORPORATE RESOURCES

• GATHERING INFORMATION

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DETERMINING THE SALES STRATEGY

OPTION TO FIT YOUR CUSTOMER

1. SCRIPT-BASED SELLING—Used when all customers’ needs are similar

2. NEEDS SATISFACTION SELLING—Identifying buyers’ needs and selling to them

3. CONSULTATIVE SELLING—Bring specialized expertise for a customized solution

4. STRATEGIC PARTNER SELLING—Seller-Customer joint effort for developing product solutions

Exhibit 13-1

(32)

• Limited

relationships

• Failure to monitor

competitors or industry • Generate

reorders • Upgrade • Full-line sell

• Secure complete commitment from both companies • Manage change Exploratio n Awarenes s Commitment Expansio n

• Set correct expectations • Ensure proper initial use

• Follow up

• Make personal visits

• Handle complaints

Dissolution

(33)

PARTNERSHIP COMMUNICATION:

FROM SINGLE LEVEL TO MULTI-LEVEL

Buying Company Selling Company Engineering Marketing Sales Finance Credit and Billing Shipping & Receiving Production Marketing Accounting Finance Purchasing Department Shipping & Receiving Production Marketing Accounting Finance Purchasing Shipping & Receiving Buying Company Engineering Marketing

(34)

SALES ORGANIZATION OPTIONS

1. ORGANIZE GEOGRAPHICALLY USING CITIES, STATES, COUNTRIES, ZIP CODES, BY

ACCOUNT

2. ORGANIZE BY PRODUCT AND DEVELOP

SPECIALISTS FOR EACH PRODUCT CATEGORY

(35)

BUYING AND SELLING TEAMS

STREAMLINE MULTILEVEL SELLING

Vice President Of Purchasing

Vice President

Of Purchasing Vice President_{Of Sales}Vice President_{Of Sales}

Director of Purchasing

Director of

Purchasing AccountManager

Account Manager

Engineer

Engineer Product

Specialist

Product Specialist

Buying Company Selling Company

Exhibit 13-5

(36)

CUSTOMER FOCUSED TEAM STRUCTURE CUSTOMER FOCUSED TEAM STRUCTURE

Account Consultant F&A Rep. Customer Sales Specialists Account Manager Team Leader Manufacturing Finance and Accounting Other Business Other Rep.(s) Purchasin g Agent Shipping CSS Rep. Customer Support Service Purchasin Shipping Manager Sales Specialist

(37)

Exhibit 13-8

ALLOCATION GRID FOR SALES RESOURCES

Relatively fewer resources should be allocated here

Low

Maintain sufficient

resources to continue to reap the sales

potential and strong position

High

Direct more sales resources here Assign to alternative method of communicating, such as telemarketing Weak Strong

MARKET LIFETIME VALUE

RELATIVE POSITION

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DO YOU OUTSOURCE THE SALES FORCE?

YES

NO

•

Establish relationships

•

Salary and selling

expenses can be limited

•

Little/no up-front investment

•

Loss of control over sales presentation

•

Products may not be a selling priority with

representative

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SALES FORCE CONTROL MECHANISMS

•

ESTABLISH QUOTAS – Fair and Understandable

• Activity Quotas

• Performance Quotas

•

ESTABLISH COMPENSATION PLAN – Equitable, Stable, Understandable

• Straight Salary

• Straight Commission • Combination Plans • Bonus System

•

MOTIVATION ACTIVITIES– • Keep Sales Force Producing

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MANAGER’S DILEMMA: EVALUATING

PERFORMANCE & MAINTAINING MOTIVATION

1. REVIEW SPECIFIC SALES OBJECTIVES

2. OBTAIN APPROPRIATE PERFORMANCE DATA (outcomes and effort)

3. EVALUATE WHAT WAS BEYOND SALESPERSON’S CONTROL

4. IDENTIFY PROBLEMS AND OPPORTUNITIES

5. CREATE A STRATEGY THAT RESOLVES PROBLEMS

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RECOGNIZING AND IDENTIFYING A PROBLEM

Expectations

Enormity of problem rests on length of this difference

Results

PROBLEM RECOGNITION

1. Our sales are down: WHY?

2. We can’t see customers: WHY?

3. We can’t make appointments on time : WHY?

4. We spend too much time covering territory : WHY? 5. Our territories are too big : WHY?

6. We don’t have enough salespeople : WHY?

THE 6xWHY FILTER Ask the WHY question at least six times (or as many times as necessary)

PROBLEM IDENTIFICATION

“The Problem”

CONCLUSION / PROBLEM

We haven’t matched demand to our sales force.