Management of a Sales Force

by Spiro, Rosann L.; Rich, Gregory A.; Stanton, William J.

• ISBN13: 9780073529776
• ISBN10: 007352977X
• Edition: 12th
• Format: Hardcover
• Copyright: 2007-01-17
• Publisher: McGraw-Hill/Irwin

Summary

Management of a Sales Forceis the best selling text in the sales management market, with a reputation for blending leading-edge research and student-friendly writing better than any other book. The 12th edition has been thoroughly revised to reflect all the changes that affect the sales manager's role, from the increasing globalization of business to savvier customers who now use the internet to research their purchasing decisions. All chapters have been updated with current company examples that demonstrate how the best sales executives are adapting to these and other new challenges. In addition, the latest sales management research studies and reports are presented in a straightforward, easy-to-read manner, makingManagement of A Sales Force12e, by far the most current sales management textbook on the market.

Table of Contents

List of Cases	p. xxii
Introduction to Sales Force Management	p. 2
The Field of Sales Force Management	p. 7
Scope and Focus of This Book	p. 10
The Nature of Personal Selling	p. 11
Personal Selling and the Marketing Mix	p. 11
Relationship Marketing and the Role of Personal Selling	p. 11
The Nature of Sales Jobs	p. 12
How Sales Jobs Differ from Other Jobs	p. 15
New Dimensions of Personal Selling: The Professional Salesperson	p. 17
The Nature of Sales Management	p. 18
Role and Skills of a Sales Manager	p. 18
Administration-A Distinct Skill	p. 19
Levels of Sales Management Positions	p. 20
How Sales Managers' Jobs Differ from Other Management Jobs	p. 23
Importance of Personal Selling and Sales Management	p. 23
In Our Economy	p. 23
In an Individual Organization	p. 23
To You, the Student	p. 24
Sales Force Management Challenges in the 21st Century	p. 25
Summary	p. 28
Key Terms	p. 28
Questions and Problems	p. 29
Experiential Exercises	p. 29
Internet Exercises	p. 30
References	p. 30
Strategic Sales Force Management	p. 38
The Marketing System	p. 39
External Environment	p. 39
Internal Variables	p. 41
The Marketing Concept and Marketing Management	p. 41
Evolution of Marketing Management	p. 42
Evolution of Selling in the United States	p. 43
Relationship Marketing	p. 46
Integrating Marketing and Sales Functions	p. 48
Integrating Production and Sales	p. 49
Strategic Planning	p. 49
Objectives	p. 49
Strategies	p. 50
Tactics	p. 50
Strategic Planning at the Company, Marketing, and Sales Force Levels	p. 51
Strategic Planning for the Total Company	p. 51
Strategic Marketing Planning	p. 52
Sales Force Strategy	p. 53
Strategic Trends	p. 54
Internet Selling	p. 54
Multiple Sales Channels	p. 55
Multiple Relationship Strategies	p. 55
Marketing Management's Social Responsibility	p. 56
Summary	p. 57
Key Terms	p. 57
Questions and Problems	p. 58
Experiential Exercises	p. 58
Internet Exercises	p. 59
References	p. 59
The Personal Selling Process	p. 65
Prospecting	p. 66
Identifying Leads	p. 66
Qualifying Leads	p. 68
Preapproach: Planning the Sale	p. 69
Customer Research	p. 69
Planning the Sales Presentation	p. 70
The Approach	p. 70
Need Assessment	p. 71
The Presentation	p. 72
Product Demonstrations	p. 73
Prepared Sales Presentations	p. 74
Developing Effective Presentations	p. 75
Meeting Objections	p. 75
Price or Value Objections	p. 76
Product/Service Objections	p. 77
Procrastinating Objections	p. 77
Hidden Objections	p. 78
Gaining Commitment	p. 78
Follow-Up	p. 79
Summary	p. 80
Key Terms	p. 81
Questions and Problems	p. 81
Experiential Exercises	p. 82
Internet Exercises	p. 82
References	p. 83
Organizing, Staffing, and Training A Sales Force	p. 88
Sales Force Organization	p. 91
Nature of Sales Organizations	p. 91
Sales Force Organization and Strategic Planning	p. 92
Characteristics of a Good Organization	p. 93
Role of an Informal Organization	p. 94
Basic Types of Organizations	p. 94
Specialization within a Sales Department	p. 96
Geographic Specialization	p. 97
Product Specialization	p. 98
Market Specialization	p. 100
Combination of Organizational Bases	p. 101
Additional Strategic Organizational Alternatives	p. 101
Strategic Account Management	p. 102
Buying Centers and Team Selling	p. 104
Independent Sales Organizations	p. 107
E-Commerce and Telemarketing	p. 111
Organizing for International Sales	p. 113
Home-Country Intermediaries	p. 113
Foreign-Country Intermediaries	p. 114
Company Sales Force Operating Abroad	p. 114
Summary	p. 115
Key Terms	p. 116
Questions and Problems	p. 116
Experiential Exercises	p. 117
Internet Exercise	p. 118
References	p. 118
Profiling and Recruiting Salespeople	p. 126
Sales Force Selection and Strategic Planning	p. 127
Importance of a Good Selection Program	p. 128
The Law and Sales Force Selection	p. 124
Scope of Sales Force Staffing Process	p. 131
The Planning Phase	p. 131
The Recruiting Phase	p. 132
The Selection Phase	p. 132
The Hiring and Assimilation Phases	p. 132
Establishing Responsibility for Recruiting, Selection, and Assimilation	p. 132
Determining the Number of People Needed	p. 133
Developing a Profile of the Type of People Needed	p. 134
Job Analysis	p. 134
Job Description	p. 134
Qualifications Needed to Fill the Job	p. 136
Methods of Determining Qualifications	p. 137
Recruiting and Its Importance	p. 139
Need for Many Recruits	p. 140
Finding and Maintaining Good Recruiting Sources	p. 140
Sources for Recruiting Sales Representatives	p. 141
Referrals	p. 141
Current Employees	p. 142
Other Companies: Competitors, Customers, Noncompetitors	p. 142
The Internet	p. 143
Educational Institutions	p. 144
Advertisements	p. 145
Employment Agencies	p. 146
Part-Time Workers	p. 146
Diversity	p. 146
Minority Groups	p. 146
Women	p. 147
Recruiting Evaluation	p. 147
Summary	p. 148
Key Terms	p. 149
Questions and Problems	p. 149
Experiential Exercises	p. 150
Internet Exercise	p. 150
References	p. 155
Selecting and Hiring Salespeople	p. 159
Selection Tools and Strategic Planning	p. 160
Legal Considerations	p. 160
Application Blanks	p. 162
Reasons for Using Application Blanks	p. 162
Information Asked For on Application Blanks	p. 162
Personal Interviews	p. 163
Nature and Purpose	p. 163
Reliability of Personal Interviews as Predictors of Success	p. 164
Improving the Validity of Interviews	p. 165
Interview Structure	p. 165
Interview Focus	p. 166
Timing and Method of the Interview	p. 168
Psychological Testing	p. 171
Legal Aspects of Testing	p. 172
A Framework for Testing	p. 172
Problems in Testing	p. 173
References and Other Outside Sources	p. 173
Background Checks	p. 174
Legal Considerations	p. 175
Assessment Centers	p. 175
The Job Offer Decision	p. 175
Ranking the Recruits	p. 176
Communicating with Applicants	p. 176
The Hiring Phase	p. 176
Extending the Offer	p. 176
Socialization and Assimilation	p. 177
Preentry Socialization	p. 178
Assimilation of New Hires	p. 179
Meeting Social and Psychological Needs	p. 181
Summary	p. 181
Key Terms	p. 182
Questions and Problems	p. 183
Experiential Exercises	p. 184
Internet Exercises	p. 184
References	p. 184
Developing, Delivering, and Reinforcing a Sales Training Program	p. 193
The Value of Sales Training	p. 194
Sales Training and Strategic Planning	p. 195
Training Assessment	p. 196
What Are the Training Program Objectives?	p. 196
Who Should Be Trained?	p. 198
What Are the Training Needs of the Individual Rep?	p. 200
How Much Training Is Needed?	p. 201
Program Design	p. 202
Who Should Do the Training?	p. 202
When Should the Training Take Place?	p. 204
Where Should the Training Take Place?	p. 204
What Should the Content of the Training Be?	p. 206
What Teaching Methods Should Be Used?	p. 211
Reinforcement	p. 214
Training Evaluation	p. 215
Summary	p. 216
Key Terms	p. 216
Questions and Problems	p. 217
Experiential Exercises	p. 217
Internet Exercise	p. 218
References	p. 218
Directing Sales Force Operations	p. 224
Motivating a Sales Force	p. 227
Motivation-What Is It?	p. 227
Dimensions of Sales Motivation	p. 228
Motivation and Strategic Planning	p. 228
Importance of Motivation	p. 228
Unique Nature of the Sales Job	p. 228
Individuality of Salespeople	p. 229
Diversity in Company Goals	p. 229
Changes in Market Environment	p. 229
Behavioral Concepts in Motivation	p. 229
Understanding Individual Needs	p. 230
Hierarchy of Needs Theory	p. 230
Dual-Factor Theory	p. 231
Expectancy Theory	p. 232
Role Theory	p. 235
Salesperson Characteristics	p. 236
Selecting Effective Combinations of Motivational Tools	p. 237
Financial Rewards	p. 238
Compensation	p. 238
Other Financial Rewards	p. 238
Sales Contests	p. 239
Nonfinancial Rewards	p. 240
Job Enrichment and Support	p. 241
Recognition and Honor Awards	p. 241
Promotions	p. 242
Encouragement and Praise	p. 242
Corporate Culture	p. 242
Sales Meetings	p. 243
Purposes of Sales Meetings	p. 243
Planning for Sales Meetings	p. 243
Challenges and Changes in Sales Force Motivation	p. 244
Plateaued Salespeople	p. 244
Sales Force Segmentation	p. 245
Motivation and Performance	p. 245
Summary	p. 247
Key Terms	p. 247
Questions and Problems	p. 248
Experiential Exercises	p. 248
Internet Exercises	p. 249
References	p. 249
Sales Force Compensation	p. 256
Sales Force Compensation and Strategic Planning	p. 257
Objectives of a Compensation Plan	p. 258
The Company's Perspective	p. 258
The Salesperson's Perspective	p. 260
Designing a Sales Compensation Plan	p. 261
Some Useful Generalizations	p. 261
Review Job Descriptions	p. 262
Identify Specific Objectives	p. 262
Establishing the Level of Compensation	p. 263
Developing the Method of Compensation	p. 264
Basic Types of Compensation Plans	p. 265
Straight Salary Plans	p. 265
Straight Commission Plans	p. 267
Combination Plans	p. 271
Linking the Method to the Objective	p. 272
Indirect Monetary Compensation	p. 273
Final Steps in Development of the Plan	p. 274
Pretest the Plan	p. 274
Introduce the Plan to the Sales Force	p. 274
Install the Plan, Monitor It Continuously, and Evaluate It Periodically	p. 275
Summary	p. 275
Key Terms	p. 276
Questions and Problems	p. 276
Experiential Exercises	p. 277
Internet Exercises	p. 278
References	p. 278
Sales Force Quotas and Expenses	p. 284
Sales Quotas	p. 284
Relation to Sales Potential	p. 285
Sales Quotas and Strategic Management	p. 285
Purposes of Sales Quotas	p. 285
To Indicate Strong or Weak Spots in the Selling Structure	p. 285
To Furnish Goals and Incentives for the Sales Force	p. 286
To Control Salespeople's Activities	p. 286
To Evaluate Productivity of Salespeople	p. 287
To Improve Effectiveness of Compensation Plans	p. 287
To Control Selling Expenses	p. 287
To Evaluate Sales Contest Results	p. 287
Types of Quotas	p. 288
Sales Volume Quotas	p. 288
Profit Quotas	p. 289
Expense Quotas	p. 289
Activity Quotas and Customer Satisfaction	p. 289
Combination Quotas	p. 290
Bases for Setting a Sales Volume Quota	p. 291
Quotas Based on Sales Potential	p. 291
Adjustments to Potential-Based Quotas	p. 291
Quotas Based on Factors other than Potential	p. 292
Administration of Sales Quotas	p. 293
Typical Administrative Weaknesses	p. 294
Gaining Sales Force Acceptance of a Quota Plan	p. 295
Sales Force Expenses	p. 295
Sales Force Expenses and Strategic Planning	p. 295
Internal Revenue Service Regulations	p. 296
Legitimate Travel and Business Expenses	p. 296
Characteristics of a Sound Expense Plan	p. 298
No Net Gain or Loss for the Reps	p. 298
Equitable Treatment of the Reps	p. 299
No Curtailment of Beneficial Activities	p. 299
Minimal Detail and Administrative Expense	p. 299
Clarity	p. 299
Company Control of Expenses and Elimination of Padding	p. 299
Methods of Controlling Expenses	p. 300
Salespeople Pay Own Expenses	p. 300
Unlimited-Payment Plans	p. 300
Limited-Payment Plans	p. 301
Combination Plans	p. 302
Control of Sales Force Transportation	p. 303
Ownership or Leasing of Automobiles	p. 303
Reimbursement Plans for Employee-Owned Cars	p. 305
Other Methods of Expense Control	p. 307
Training and Enforcement	p. 308
Credit Cards	p. 308
The Expense Bank Account	p. 308
Change in Nature of Entertainment	p. 308
Internet Selling and Telemarketing	p. 309
Careful Travel Planning	p. 309
Summary	p. 310
Key Terms	p. 310
Questions and Problems	p. 311
Experiential Exercises	p. 312
Internet Exercises	p. 312
References	p. 312
Leadership of a Sales Force	p. 317
Leadership Characteristics and Skills	p. 318
Personal Characteristics	p. 318
Managerial Skills	p. 319
Leadership Style	p. 320
Transactional Leadership	p. 320
Transformational Leadership	p. 320
Situational Leadership	p. 322
Leadership and Strategic Planning	p. 324
Tools and Techniques of Leadership	p. 324
Personal Contact	p. 324
Sales Reports	p. 325
Telecommunications	p. 326
Printed Aids	p. 327
Meetings	p. 327
Indirect Supervisory Aids	p. 327
Outcomes of Effective Leadership	p. 329
Well-Trained Salespeople	p. 329
Trust among Salespeople	p. 330
Citizenship Behaviors	p. 330
Better Performance	p. 330
Sales Force Morale	p. 330
Problems Encountered in Leadership	p. 331
Poor Performance	p. 331
Substance Abuse	p. 332
Expense Accounts	p. 333
Unethical Behavior	p. 333
Sexual Harassment	p. 334
Summary	p. 336
Key Terms	p. 337
Questions and Problems	p. 337
Experiential Exercises	p. 338
Internet Exercises	p. 338
References	p. 338
Sales Planning	p. 346
Forecasting Sales and Developing Budgets	p. 349
Sales Forecasting and Strategic and Operational Planning	p. 350
Explanation of Basic Terms	p. 350
Market Potential and Sales Potential	p. 350
Sales Forecast	p. 351
Estimating Market and Sales Potentials	p. 352
Customer Analysis	p. 353
Market-Factor Derivation	p. 353
Surveys of Buyer Intentions	p. 354
Test Markets	p. 355
Territory Potentials	p. 356
Sales Forecasting	p. 358
Difficulty of Sales Forecasting	p. 358
Sales Forecasting Periods	p. 358
Factors Influencing the Sales Forecast	p. 358
Sales Forecasting Methods	p. 359
Executive Opinion	p. 361
Sales Force Composite	p. 361
Moving Average Technique	p. 362
Exponential Smoothing Models	p. 364
Regression Analysis	p. 365
"Must Do" Forecasts	p. 366
Capacity-Based Forecasts	p. 366
Some Guiding Principles for Forecasting	p. 366
Fit the Method to the Product / Market	p. 366
Use More than One Method	p. 367
Minimize the Number of Market Factors	p. 367
Recognize the Limitations of Forecasting	p. 368
Use the Minimum / Maximum Technique	p. 368
Understand Mathematics and Statistics	p. 368
Review the Forecasting Process	p. 368
Developing Budgets	p. 369
Purposes of Budgeting	p. 370
Planning	p. 370
Coordination	p. 370
Evaluation	p. 371
Determining the Sales Budget	p. 371
Budgeting by the Percentage-of-Sales Method	p. 371
Budgeting by the Object-and-Task Method	p. 371
Budgets for Sales Department Activities	p. 372
The Sales Budget	p. 372
The Selling-Expense Budget	p. 372
The Administrative Budget	p. 373
The Budgeting Process for the Firm	p. 373
Budget Periods	p. 375
Summary	p. 376
Key Terms	p. 376
Questions and Problems	p. 377
Experiential Exercises	p. 378
Internet Exercise	p. 378
References	p. 378
Sales Territories	p. 385
Nature and Benefits of Territories	p. 386
Designing Territories	p. 387
Determine Basic Control Unit for Territorial Boundaries	p. 387
Determine Location and Potential of Customers	p. 389
Determine Basic Territories	p. 390
Using Computers in Territory Design	p. 395
Assigning Salespeople to Territories	p. 396
Revising Sales Territories	p. 397
Indications of Need for Adjustment	p. 397
Why Are So Many Sales Territories Unbalanced?	p. 398
Territorial Coverage-Managing a Sales Rep's Time	p. 400
Routing the Sales Force	p. 400
Time Management and Computer Support Systems	p. 402
Summary	p. 403
Key Terms	p. 404
Questions and Problems	p. 404
Experiential Exercises	p. 405
Internet Exercises	p. 405
References	p. 406
Evaluating Sales Performance	p. 412
Analysis of Sales Volume	p. 415
Strategic Relationship between Planning and Evaluation	p. 415
Relation of Performance Evaluation to Sales Control	p. 417
Introduction to Sales Force Performance Evaluation	p. 417
A Marketing Audit: A Total Evaluation Program	p. 417
A Sales Management Audit	p. 418
The Evaluation Process	p. 418
Components of Performance Evaluation	p. 419
Performance Evaluation and Misdirected Marketing Effort	p. 419
Nature of Misdirected Marketing Effort: The 80-20 Principle	p. 419
Reasons for Misdirected Effort	p. 420
The Need for Detailed Data	p. 421
Bases for Analyzing Sales Volume	p. 422
Total Sales Volume	p. 422
Sales by Territories	p. 423
Sales by Products	p. 425
Sales by Customer Classifications	p. 426
The Insufficiency of Sales Volume Analysis	p. 427
Sales Force Automation and Performance Evaluation	p. 428
Summary	p. 429
Key Terms	p. 429
Questions and Problems	p. 430
Experiential Exercises	p. 430
Internet Exercises	p. 430
References	p. 431
Marketing Cost and Profitability Analysis	p. 434
Nature and Scope of Marketing Cost Analysis	p. 435
Marketing Cost Analysis and the Accounting System	p. 435
Marketing Cost Analysis Compared with Production Cost Accounting	p. 435
Types of Marketing Cost Analysis	p. 436
Analysis of Ledger Expenses	p. 436
Analysis of Activity Expenses	p. 437
Analysis of Activity Costs by Market Segments	p. 438
Problems in Marketing Cost Analysis	p. 442
Allocating Costs	p. 442
The Contribution-Margin versus Full-Cost Controversy	p. 445
Use of Findings from Profitability Analysis	p. 447
Territorial Decisions	p. 447
Products	p. 448
Customer/Size of Order	p. 448
Return on Investment-An Evaluation Tool	p. 450
Use of Return on Assets Managed to Evaluate Field Sales Managers	p. 451
Summary	p. 452
Key Terms	p. 453
Questions and Problems	p. 453
Experiential Exercises	p. 454
Internet Exercise	p. 454
References	p. 455
Evaluating a Salesperson's Performance	p. 457
Nature and Importance of Performance Evaluation	p. 458
Concept of Evaluation and Development	p. 458
Concept of Evaluation and Direction	p. 458
Importance of Performance Evaluation	p. 458
Difficulties Involved in Evaluating Performance	p. 459
Importance of a Good Job Description	p. 460
Program for Evaluating Performance	p. 460
Establish Some Basic Policies	p. 460
Select Bases for Evaluation	p. 462
Set Performance Standards	p. 466
Compare Performance Standards	p. 467
Discuss the Evaluation with the Salesperson	p. 471
Using Evaluation Data: An Example	p. 472
Joe's Sales Performance	p. 474
Gus's Sales Performance	p. 476
Paula's Sales Performance	p. 476
The Sales Manager's Decisions	p. 477
Summary	p. 477
Key Terms	p. 478
Questions and Problems	p. 478
Experiential Exercises	p. 478
Internet Exercises	p. 479
References	p. 479
Ethical and Legal Responsibilities of Sales Managers	p. 484
Business Ethics and Sales Management	p. 485
The Legal-Ethical Confusion	p. 485
The Pressure to Compromise Personal Ethics	p. 486
The Problem of Determining Ethical Standards	p. 487
Ethical Situations Facing Salespeople and Sales Executives	p. 488
Establish an Ethical Climate	p. 491
Public Regulation and Sales Managers	p. 493
Price Discrimination	p. 493
Unfair Competition	p. 494
Green River Ordinances	p. 495
Cooling-Off Laws	p. 495
Current Problems	p. 496
Summary	p. 497
Key Terms	p. 497
Questions and Problems	p. 498
Experiential Exercises	p. 498
Internet Exercises	p. 499
References	p. 499
Integrated Cases	p. 507
Careers in Sales Management	p. 555
The Challenge	p. 555
Career Paths in Sales Management	p. 556
The Rewards of a Sales Management Job	p. 558
What It Takes to Be a Successful Sales Manager	p. 560
Your Strategic Career Plan	p. 562
Final Word	p. 564
Reference	p. 564
Indexes
Name Index	p. 565
Company Index	p. 567
Subject Index	p. 570
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