Chapter 2

Linking strategies to sales

Main references :
Johnston, Mark W. and Marshall, Greg W. (2016) Sales Force Management, 11th ed, McGraw-Hill

Sales Force Management 2017 by Gregory A. Rich &

Selling & Sales Management 2019 David Jobber, Geoffrey Lancaster and Kenneth Le Meunier-
FitzHugh

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Chapter 2 Outline 3. Strategic Planning
• Objectives
• Strategies
1. The Marketing System • Tactics
• External vs. Internal 4. Planning Across the Company
environment • Company level
2. The Marketing Concept • Marketing level
• Evolution of marketing • Sales force level
management
5. Strategic Trends
• Evolution of selling
• Social selling
• Relationship marketing
• Hybrid sales channels
• Integrating sales and…
• Multiple relationship strategies
• Marketing
• Production • Social responsibility of marketing

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Figure 2-1
A company’s
complete
marketing
system

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Figure 2-2 What are the three
1. Customer / marketkeys
orientation – All employees
Marketing to being
mustsuccessful with
be focused on the
concept the marketing
customer concept?
success Marketing Concept:
2. Coordination of marketing
factors Identifying the needs and activities – There must be good
wants of a target market, and communication throughout the
then satisfying those needs and firm (including between
marketing and sales)
wants better than the
competition does
3. Profitable sales volume –
The firm must efficiently
manage margins and minimize
cost.

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Evolution of Marketing Management
• Production-orientation stage
• Focus on mass-producing a limited variety of products for as little cost as possible
• Sales-orientation stage
• Age of the hard-sell
• Marketing-orientation stage When the marketing
concept first emerges
• Focus on identifying and meeting customer needs
• Relationship-orientation stage
• A shift toward long-term relationships (a natural extension of marketing-orientation)

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 “Hey, hey, hey! Are you folks nuts?
I’m telling you, this is the car for you!” 6
Evolution of Selling in the U.S.
• Peddlers (early 1800s)
• Wide variety of goods, bartering was common
• Canvassers (mid 1800s)
• Sold for single manufacturer (e.g., lightning rods), paid commission,
used high-pressure tactics based on psychology theory
• Book agents (mid 1800s)
• Much more likely to be females
• Drummers (later 1800s)
• Represented wholesale companies, sold to general stores, sales
tactics were less scientific, relied on jokes and stories

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Figure 2-4
Selling styles
Consider the four stages
depicted in a in the evolution of
1927 comic marketing
management.
Are the strategies of
these salespeople most
consistent with
production-, sales-,
marketing-, or
relationship-
orientation?
(advance to next slide)

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In which stage of marketing evolution is the drummer?
• Some might argue relationship-orientation, because he is friendly with the buyer – but this appears to be a
personal friendship, not a relationship based on the needs of the buyer’s business.
• Others would argue production-orientation, because the products appear to be selling themselves (the
salesperson just tells jokes and is a mere order-taker)

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In which stage of marketing evolution is the solicitor?
• Most would argue sales-orientation, because he is using high-pressure sales tactics.

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In which stage of marketing evolution is the salesman of “today?”
• Most would argue relationship-orientation (even though this comic is from 1927).
• The marketing concept is clearly being practiced, and the buyer looks to be agreeing to a long-term
relationship.

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Relationship Marketing: Four key issues…
• Open communication
• Salespeople must facilitate close collaboration between the selling and buying firms

• Empowering employees
• In order to solve customer problems, salespeople need the skills, responsibility, and authority
to make decisions and take actions

• Customers and the planning process

• The selling firm should allow the customer to be involved in the seller’s planning process

• Working in teams
• Team selling is necessary to service all members of the buying center

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Benefits of Team Selling
• Fosters creativity and learning
• Blends complementary strengths
• Builds trust
• Teaches conflict resolution skills
• Promotes a wider sense of ownership
• Encourages healthy-risk taking

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Integrating Marketing and Sales
• Marketing develops the marketing strategy
• Sales implements the strategy in the field
• Consequently,
• Close communication between marketing and sales is
important
• Salespeople should be involved in the strategy
development process

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Integrating Production and Sales
• This is important because
• Production makes what sales sells
• Production schedules are based on the sales forecast
• Under-production leads to longer lead times
• Customers are dissatisfied because the product they want
is not available
• Over-production leads to excessive, costly inventory

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 Figure 2-5 Relationship of objectives, strategies, and tactics

• Objectives are the broad

goals around which a
strategic plan is formulated
• Strategies are the plans of Set Formulate Develop
action
• Tactics are the specific objectives strategies tactics
activities that people must
perform in order to carry
out the strategy

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An International Perspective on Strategy
• The sales cycle is longer outside own country :
• Sales cycle is defined as the length of time between first making
contact with a buyer and getting the sale
• Reasons for this vary across cultures
• Germans expect multiple references and do extensive background research
• Some customers expect weeks and weeks of schmoozing and entertaining
• British do not commit before extensive negotiation about the price and
thorough double-checking of facts and figures
• More unpredictable delays in unstable economies

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Social • Using relationship-oriented social
Selling media tools to identify the right
This is one of three strategic trends that have prospects, and turn them into
had a major impact on the sales strategies of
today. close, long-term customers.
• Used by both B2C and B2B
salespeople
• Includes Facebook, Twitter,
YouTube, and LinkedIn’s Sales
Navigator

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Social
Selling
This is one of three strategic trends that have
had a major impact on the sales strategies of
today.

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Hybrid Sales • Selling products through multiple
Channels channels, such as
This is one of three strategic trends that have • Outside sales force
had a major impact on the sales strategies of
today. • Inside sales force
• Distributors
• E-commerce
• To reach different segments
• Often uses less expensive methods
for tasks not requiring face-to-face
contact

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Multiple
Relationship • Segmenting customers based on
Strategies what type of relationship they
This is one of three strategic trends that have want with the sales force
had a major impact on the sales strategies of
today. • Some customers prefer a close
relationship through consultative
selling
• Other customers might prefer to be
dealt with through transactional
selling

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Marketing Management’s Social Responsibility
• Businesses today must act in a socially responsible manner
• Due to concerns with global warming, toxic waste, pollution
• Pressure to change comes from consumer discontent, concern for the
environment, and a variety of political-legal forces
• Shift from materialism to humanitarianism in our society

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Tutorial 2
Read this case Jobber's pg 47
Cato Lifts Ltd
Matthew Cley had been senior sales executive at Cato Lifts Ltd for the past six
years, but recently the company was starting to struggle to maintain its sales
revenue. Cato Lifts produced a range of technically robust, mini lifts for
commercial buildings, but recently sales had been falling. Cato’s major customers
were hotels and public buildings. The products were fitted to enable physically
impaired people to access the upper floors, especially where full-sized lifts could
not be fitted. The products were sold through the UK by a sales force of four
people. Each representative covered a different area of the country and all had
been employed for a number of years. Although some 95 per cent of Cato’s sales
were to commercial buildings, there was a small, but growing, demand for
individual applications in a variety of situations. Additionally, there had recently
been an enquiry from the Government offices for the Yangpu District in Shanghai,
which could be an interesting potential development for new markets.

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Tutorial 2
Read this case Jobber's pg 47
Cato Lifts Ltd
The reason that sales were concentrated on commercial buildings was historical, as the
company originally developed the stair lifts for its own use in its canning factory (a
separate business). Cato Lifts Ltd was formed to sell the product to other, similar
companies and then expanded to publically owned buildings. This focus on commercial
selling (B2B) meant that the majority of sales were made through personal selling. The
sales team all had a technical sales background and sold by emphasising the products’
flexibility and technical superiority. The salespeople were very good at talking to
commercial buyers, who already understood the benefits of quality and longevity, and
who also appreciated the after-sales maintenance programme that was on offer. The
decreasing sales revenue was arising due to the fact that the UK market was becoming
saturated and Cato lifts were so good that they did not need replacing very frequently
(every ten years plus). The company did very little marketing, as traditionally sales were
made by personal recommendations and mailing, on request, of a high-quality, glossy
catalogue. However, now that the sales were falling, Matthew was convinced that they
were going to have to start changing their practices and engage in a marketing campaign
to generate new sales and enter new markets.

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Cato Lifts Ltd

Pricing was done on a cost-plus basis, with total costs being calculated and a
fixed percentage added to account for profits. Prices were thus fixed by the
accounts department, and sales had no say in how they were established.
This led to dissent among the salespeople, who constantly argued that
their pricing was too inflexible to allow them to bid for new orders.
Delivery times were slow compared with the average in the industry and
there were few options available in terms of the product’s configuration,
such as colour options (only available in silver) and layout. As already
mentioned, promotions and advertising were almost non-existent.
The market overseas was far more competitive than in the UK, with many
rivals, particularly from EU countries, who had similar products. While Cato
Lifts was maintaining its market share in the UK, because of its excellent
reputation and brand name, it would not have this advantage if it were to
compete for new business in Europe. Many of these European competitors
were also introducing new innovations, drawing upon recent advances in
electronics, so Cato Lifts should probably not assume that its current
market-leader position in the UK was safe.
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Cato Lifts Ltd

Unlike many of his colleagues, Matthew Cley was worried by developments of the past three years
and felt there was a need for some radical changes. He was aware that the more successful
competitors in Europe had operated with a marketing philosophy. Compared with five years ago
in this type of business, it was now common practice for companies to appoint marketing
managers and have a considerable marketing budget. Furthermore, he knew from talking to other
people in the industry that such companies considered sales to be an integral part of marketing.
At a recent meeting with his senior staff, he mentioned to the CEO the possibility of appointing a
marketing director. After some consultation with the management board, and with the evidence
of recent sales figures, the decision was made to appoint a marketing manager. This person would
have marketing experience, and most probably come from a light-engineering industry. The
person appointed would have equal status to the sales manager, and ultimately either the new
appointee, or Matthew Cley, would be promoted to the board of directors to represent both the
sales and marketing functions.
Matthew Cley was delighted with the new developments and felt that there were considerable
opportunities for entering new markets and expanding sales to new UK customers. However,
there would be a need for a change in the philosophy of the company. Introducing a marketing
philosophy into its operations, to have a customer orientation and to invest in marketing
communications to ‘sell’ the idea of Cato Mini Lifts to the market, were essential steps.
Furthermore, he knew from talking to other people in the industry that marketing-orientated
companies considered sales to be an integral part of these new marketing messages, and that a
new sales approach would also be needed.

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Discussion questions
1.1. Analyse Cato Lifts Ltd’s current approach to sales and marketing.
1.2. Comment on the advantages and difficulties of adopting a
marketing orientation.
1.3. What sort of marketing mix should Cato Lifts adopt if they wish to
sell to: (a) non-commercial buyers? (b) international buyers?
1.4. Outline any anticipated problems if Matthew Cley goes ahead and
appoints a marketing manager.
Q2: Do MCQ given

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Read case Jobber pgAuckland Engineering plc pg 76
Harold Horne, sales manager for Auckland Engineering plc – a well-established engineering company in
Bishop Auckland, County Durham, received the following memo from D.C. Duncan, his recently appointed
marketing director.
Memo To: H. Horne, Sales Manager
From: D.C. Duncan, Marketing Director Date: 16 January 2018
Subject: Preparation of annual marketing plan
You will recall that at our series of preliminary meetings to discuss future marketing plans for the company, I
suggested that I was unhappy with the seemingly haphazard approach to planning. Accordingly, you will recall
it was agreed between departmental heads that each would undertake to prepare a formal input to next
month’s planning meeting.
At this stage I am not seeking detailed plans for each product market; rather, I am concerned that you give
thought to how your department can contribute to the planning process. Being new to the company and its
product/markets, I am not fully up to date on what has been happening to the market for our products,
although as we all know our market share, at 35 per cent, is down on last year. I would particularly like to
know what information your department can contribute to the analysis of the situation.
To help in your analysis I have summarised below what came out of our first planning meetings:
1. Business definition: It was agreed that the business needs re-defining in customer terms. An appropriate
definition for our company would be ‘Solutions to engine component design and manufacturing problems’.

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 2. SWOT analysis:
Our main strengths are:
• excellent customer awareness and an image of reliability and quality;
• sales force is technically well qualified;
• manufacturing flexibility second to none – we respond quickly and
effectively to individual customer needs.
Our main weaknesses are:
• prices approximately 10 per cent above industry average;
• spending higher proportion of turnover on advertising than most main
competitors;
• sales force not skilled in generating new leads.

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Our major opportunities are:
• some major competitors having difficulty keeping customers because of
quality and delivery problems;
• recent legislation means research and development programme on new
TDIX component, emphasising lower exhaust emission levels, should prove
advantageous;
• recent and forecast trends in the exchange rate should help export
marketing efforts;
• buyers in the industry seem prone to switching suppliers.
Our major threats are:
• our largest customer threatening to switch owing to our higher-than-
average prices;
• apart from TDIX programme, we have not been keeping pace with rapid
technological change in the industry;
• some major export markets are threatened by possibility of import
restrictions.
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3. Objectives: Financial:
• to increase return on capital employed by 5 per cent;
• net profit in the forthcoming year to be £4 million.
• Marketing: sales revenue to be increased to £35 million in the
forthcoming year.
4. Marketing strategy:
Target markets: major manufacturers of diesel engines worldwide.
Positioning: highest engineering quality and after-sales service in
supply of specialist low-volume diesel engine components.

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I would welcome your comments on my analysis, together with any
views on the appropriateness of the objectives I have set.
For the next meeting, I suggest that, as sales manager, you give some
thought to where the relative emphasis should be placed in
our promotional effort.
As I have mentioned, we seem to be spending an excessive amount on
advertising compared with our competitors. Perhaps you could give
me your thoughts on this, as I understand you were in favour of
raising our advertising budget from 1 per cent to 2 per cent of
turnover last year. As you are aware, from a limited budget, we must
decide where to place the relative emphasis in our communications
mix. Perhaps you can indicate what you feel are the major
considerations in this decision.

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Discussion questions
• Give a brief outline of ways that Sales Manager Harold Horne can
contribute to the marketing planning process at Auckland
Engineering.
• Looking at Duncan’s analysis of the previous meeting,
what issues/problems do you see that are of relevance to
the activities of the sales force?
• How would you respond to Duncan’s comments on the promotional
mix and, in particular, to his comments about the level of
advertising expenditure?
• What is the logic in conducting a SWOT analysis in this context?

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