A sales mix model for effective industrial selling

The purpose of this article is to focus on one aspect of the marketing mix for industrial firms. Specifically, the control of promotion centers on the promotional mix, which includes personal selling, advertising, and sales promotion. The personal sales mix model (Figure 1) highlights those factors that are controllable by the industrial sales representative. Also, the uncontrollables involved in industrial selling are discussed. An understanding of the personal sales mix model should aid industrial marketers in satisfying buyer's needs through effective selling.     

Applying territoriality to steps in the buyer/seller process

Territoriality is the drive of an individual to stake out, establish, maintain, and defend an area of space for personal use. The “area of space” may be physical or psychological. Industrial buyers and others involved in the buying process, as members of organizations, will act to establish individual territories within the organization and may also act to represent an organization's territorial needs. Because an understanding of the behavior of buyers is important to industrial sales people, and because the concept of territoriality is a mixture of psychological processes, physical behavior, and the space surrounding an individual, a Territoriality Scan System is proposed to assist the salesperson in improving his or her sales communications with industrial buyers. A salesperson can gather important information about an industrial buyer's psychological processes by observing the buyer's physical behavior and surrounding physical space using the Territoriality Scan System. These observational measurements can then be used to enhance the entire sales presentation.     

Salespeople satisfaction and performance feedback

A model of the relationship between sales supervision and salesforce job satisfaction is developed and tested. The model hypothesizes that salespeople will experience greater job satisfaction when they receive more performance feedback and more opportunity to participate in their supervisor's decision making processes and when they have supervisors who are high on consideration and initiation of structure. In addition, because of recent empirical evidence suggesting a possible consideration/initiation of structure interaction effect on job satisfaction, a hypothesized interaction effect was examined in this study. The results suggest that performance feedback is an important predictor of job satisfaction. Furthermore, they indicate that the sales supervisor's consideration and initiation of structure are related to the salesperson's satisfaction with certain aspects of the job. Participation and consideration/initiation of structure interaction were not found to be significant predictors of salesforce job satisfaction.     

‘It's almost like taking the sales out of selling’—Towards a conceptualization of value-based selling in business markets

While the creation of superior customer value is regarded as fundamental to a firm's long-term survival and growth, little is known about the effective implementation of a firm's value orientation at sales force level. As the sales force plays a pivotal role in implementing marketing strategies, this study adopts a discovery oriented approach and conceptualizes value-based selling as an effective sales approach in business markets. Based on in-depth interviews with sales managers in a variety of industries, we identify and portray three salient dimensions of value-based selling, namely (1) understanding the customer's business model, (2) crafting the value proposition, and (3) communicating customer value. The selling behavior entails a mutual orientation and focuses on the value-in-use potential of the offering for the customer's business profits. We argue that value-based selling is a unique concept that differs from the established selling approaches and propose a conceptual model linking value-based selling to performance outcomes. To further advance our knowledge about the effective implementation of a firm's value orientation, we identify future research avenues embracing qualitative and quantitative research methodologies.     

Evaluating and comparing salesmen's performance

The measurement and evaluation of the performance of salesmen is complicated in most firms by the situational, environmental, and personal variables involved. This complexity is further increased when management attempts performance comparisons among several salesmen or among an entire sales force. Territorial differences, multiplicity of products, and differences in backgrounds among salesmen are just a few of the factors of variability that compound management's performance measurement and evaluation tasks.In spite of these difficulties, the management process requires that the performance of salesmen be measured and compared to predetermined standards. Subjective judgements have frequently taken the place of objective analysis, particularly as to the overall or composite performance of salesmen, because of the difficulties sales managers encounter in the determination of composite measures of performance. Many have discussed the determination and use of objectives or quotas for salesmen, and some have been concerned with the development of composite measures of salesmen performance. However, most have suggested methods that require quantitative skills not possessed by many sales managers and salesmen. The application of computers to the quantitative methods that have been suggested does alleviate the computational problem but not the equally important understanding requirement. Sales personnel, particularly field managers and their salesmen, should thoroughly understand and accept the methods by which standards of sales performance are determined, in addition to the standards or quotas themselves if they are to accept evaluation against these standards [1].The purpose of this article is to discuss the various determinants of salesmen's performance and to present a practical analytical method for calculating and evaluating the overall performance of salesmen that will permit cross-comparison among all members of the sales force irrespective of differences in assignments and objectives. A hypothetical example is then presented utilizing a tabular analysis format equally appropriate for use by home office analysts or by field sales managers and their salesmen.     

Corporate Culture and Commitment: Impact on Performance of International New Product Development Programs

To achieve success in today's competitive environment, firms increasingly must develop new products for international markets. To this end, they must leverage and must coordinate broad creative capabilities and resources, which often are diffused across geographical and cultural boundaries. Recent writings in the globalization and in the new product development (NPD) literatures suggest that certain “softer” dimensions that define the behavioral environment of the firm—that is, the firm's organizational culture and management commitment—can have an important impact on the outcome of these complex and risky endeavors. But what comprises these dimensions and what type of behavioral environment scenario is linked to high performance in the international NPD effort of firms has not been articulated clearly. This research focuses on these softer dimensions, with the objective of understanding and idengifying their specific makeup as well as their relationship to the outcome of international NPD programs. Based on an integration of three literatures—organizational, new product development, and globalization—the present study develops a research instrument, comprising 18 behavioral environment measurement items as well as several outcome measures, that is administered to a broad empirical sample of goods and services firms active in NPD for international markets. Using empirical results from 252 international NPD programs, three key dimensions are idengified: (1) the innovation/globalization culture of the firm; (2) the commitment of sufficient resources to the NPD program; and (3) top management involvement in the international NPD effort. These dimensions are used to derive four clusters of firms, where each grouping represents a distinctly different behavioral environment scenario. In a preliminary analysis, it is ascertained that other aspects of the firm such as “degree of internationalization,” location of the respondent to the NPD center, and other company parameters do not form the basis of cluster membership. By linking measures of performance to the four behavioral clusters, findings are developed that clearly support this study's hypothesis that international NPD outcomes are associated with the softer behavioral environment dimensions. Scenario performance ranges from “very high” to “very low” and appears to be linked clearly to the dimensions studied. The lower‐performing firms tended to emphasize positively only one, or sometimes two, of the three dimensions. The “best performers” were found to be firms with a “positive balanced” approach to international NPD, where all three behavioral environment dimensions are supported strongly. In other words, firms in this scenario have an open and innovative global NPD culture, they ensure that sufficient resources are committed to the NPD program, and their senior managers play an active and involved role in the international NPD effort. Given this evidence of a direct link between behavioral environment and international NPD performance, the present study's findings suggest some important messages for managers charged with the development of new products for international markets.     

Time allocation of a pooled industrial sales force

The use of the salesman's daily call report has certain limitations regarding internal budgeting matters within a pooled industrial sales force. This article focuses on a case history of using “instantaneous observations” of a salesman's time for budgeting and control purposes.     

Developing and using a customer profile data bank

This article proposes the implementation of a customer profile system to aid the industrial marketer in: making daily sales decisions involving the firm's customers; the development of the vendor's “buyer mix”; and the production of marketing analysis reports used by the firm. The components of the customer profile are presented and the procedures by which these elements can be incorporated into the firm's decision making are explained. Working examples are also provided to reinforce the concepts. Unfortunately the names of the actual corporations had to be deleted or changed for reasons of confidentiality.     

Entry,Standards and Competition: Firm Strategies and the Diffusion of Mobile Telephony

This paper studies the effects of a countrys regulatory setting and competitive environment the performance of second-generation (2G) mobile on telecommunication. We consider three dimensions of sector performance: entry time, service prices and diffusion. We address the question of non-random selection arising from cross-country differences in the timing of the commercialization of new technologies. Our empirical exploration shows that this type of sample selection may indeed be a substantial problem in cross-country studies on technology diffusion and yield biased estimates of the policy variables of interest. Our estimation results suggest that standardization accelerates 2G entry and diffusion, although within-standards competition triggers less aggressive price competition than between-standards competition. We also find that an early monopolist will price more aggressively to build up an installed base. Furthermore, we find that liberalizing markets for incumbent technologies (i.e., fixed line telephony) has accelerated the commercialization of 2G.     

Industrial sales management: A case for MBO

The system of management by objectives (MBO) is a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual's major area of responsibility in terms of the results expected of him, and use these measures as guides for operating the firm and assessing the contribution of each of its members (Odiorine, 1965; Mali, 1972; Reddin, 1971; and Carroll and Tosi, 1973). Those who manage by objectives place primary emphasis on direction of efforts, and the evaluation of results (Varney, 1972).Etzel and Ivancevich (1974) have indicated several areas in marketing which can benefit from the MBO procedure, including sales management, advertising, market research, new product development, and physical distribution. This article focuses on one of these areas-sales management. The unique characteristics and activities of salesmen and sales managers demand a flexible tool of evaluation; one that can operate within a system that does not permit close “on the job” supervision. The procedures of MBO offer an evaluation blend that is well tailored to this type of situation.This article has three objectives. First, some of the specific problems and needs of industrial sales management are examined. Second, suggested MBO procedures for industrial sales management are outlined. Finally, a discussion on how MBO can operationally deal with the problems and needs of industrial sales management are presented.     

Why are you really losing sales opportunities? A buyers' perspective on the determinants of key account sales failures

Key account sales are important for business organizations. Understanding why some of these sales proposals fail from the buyer's perspective has organization-wide implications for improving firm performance. Extant literature lacks a clear understanding of the process-based determinants of sales failure within a key account context. Another problem with this research stream is its reliance on data from the salesperson, sales manager, and/or selling firm, which can introduce attribution biases. Our research overcomes sales failure attribution biases by collecting data from the industrial buying center's perspective. Thirty-five semi-structured interview cases were conducted with buying decision makers following failed key account sales proposals. The result of this inquiry is a model which outlines the determinants of sales failures. We identify three common drivers of sales failure: adaptability, relationship-potential, and cost considerations. Results indicate that these established constructs are more complex than previously specified, each having multiple attributes as defined by key account buyers.     

Product profile analysis: A tool for industrial selling

The purpose of this article is to provide a step-by-step approach to how product profile Analysis (PPA) can be applied to industrial selling. Specifically, the sales representative can use PPA to help the prospective buyer identify the key criteria involved in the purchasing activity. The concentration on buyer-oriented criteria will aid in the development of the sales representative's role as a consultant to the client. The use of PPA will also help the buyer defend the purchasing decision that was made.     

Operationalizing and testing Galbraith's center of gravity theory

This paper develops and tests an expanded model of relatedness and firm performance, based on Galbraith's (1983) center of gravity concept. Traditional empirical approaches to relatedness have focused primarily on product similarities. This research operationalizes and tests a managerial dimension of relatedness, based on a firm's historical center of gravity, which assumes that businesses in the same vertical stage of the value chain are more similar to manage than those in different stages. Empirical results support Galbraith's hypothesis that this managerial dimension of relatedness may be more important than constrained product relatedness in achieving high performance. This finding suggests that diversified firms should operate in lines of business that are managerially similar in order to minimize complexity and apply core skills appropriately. Interestingly, while managerial relatedness was positively associated with firm performance in two out of three samples, constrained product relatedness was negatively associated with performance in two of the three samples. Taken together, these results suggest that optimal relatedness profiles may be industry specific, and that corporate relatedness may be more important in managing diversity than product relatedness. Future research should seek a better understanding of the specific dimensions which underlie both product and managerial relatedness.     

Differential effects of determinants on multi-dimensions of trade show performance: By three stages of pre-show, at-show, and post-show activities

Although there have been several studies dealing with trade show performance recently, most of these research measured only overall success or sales performance of trade shows and failed to capture other dimensions of trade show performance such as image-buildings, information-gatherings and so on. In this research, we study the differential effects of determinants on each dimension of trade show performance considering the multi-stage nature of trade show management. We suggest and verify a conceptual structure that captures multi-dimensions of trade show performance (i.e., sales-related, image-building, information-gathering, and relationship-improvement) and relate each performance dimension to tactical variables such as quantifying show objectives, pre-show promotion, booth staff training, follow-up and so on. More importantly, we have categorized these variables by three stages of pre-show, at-show, and post-show activities. Thus, we developed a set of models linking tactical variables in each stage with the appropriate performance dimension. Results suggest that the variables we considered in each stage have a significant and differential impact on each dimension of trade show performance. Managerial implications of the findings are considered and limitations along with future directions discussed.     

Sales force evaluation with expectancy theory

The salespeople and their sales managers of two national firms were surveyed to examine the relationships between the salespeople's effort, performance, satisfaction, and propensity to leave their job. The 399 salespeople participating in the study were evaluated by their sales managers. Research results provide insights into the problems associated with correctly measuring performance and testing expectancy theory when salespeople are not evaluated on objective performance measures.     

Creating or destroying value through mergers and acquisitions: A marketing perspective

A majority of mergers and acquisitions are horizontal, combining companies within the same industry. They are most frequently motivated by a desire to achieve revenue and profit growth through market expansion or by adding new product lines, with cost efficiencies being a secondary agenda. However, the modest body of literature on post-merger performance using marketing metrics indicates that marketing objectives such as sales revenue and market share growth are rarely achieved. This paper reports on a detailed study of 45 M&A deals undertaken to develop a deeper understanding of how marketing performance is affected by mergers and acquisitions. Our results show that marketing performance improved along two dimensions — sales revenue growth, and a reduction in selling, marketing and administrative costs as a percentage of sales revenue, suggesting the realisation of synergies in these areas — economies of scale and scope. However, these benefits did not follow through into better returns on sales suggesting that the marketing cost economies are not sufficient to outweigh cost diseconomies in other parts of the business.     

Effective selling approaches to buyers' objections

Approaches for responding to an industrial buyer's indecision and price objections were uncovered. When an industrial buyer refuses to make a purchase decision or objects to price, an effective salesperson will seek understanding of the buyer's indecision, consciously look for common underlying objections, address the buyer's specific concern, and establish a decision deadline for the buyer.     

The moderating effect of control systems on the relationship between commission and salesperson intrinsic motivation in a customer oriented environment

Using a social psychology theory, Cognitive Evaluation Theory (CET), the authors show how commission compensation can be viewed as a sales performance contingent reward and the extent of its use to reward performance, coupled with a sales control system, impacts salesperson intrinsic motivation in a relationship selling environment. In essence, the sales control mechanisms modify the impact of the commission based on whether it is perceived as controlling or informative. This is empirically tested using a sample of business-to-business salespeople. Partial support for three hypothesized relationships is shown providing preliminary evidence that CET is a way to study the integration of commission compensation rewards, sales control systems, and motivational impact. Implications of the findings for theory and for managers are considered, along with suggested directions for future research.     

Why helping coworkers does not always make you poor: The contingent role of common and unique position within the sales team

In recent years, many companies have implemented sales teams as a way of streamlining accountability and promoting the development of sales expertise. The success of such work groups largely depends on experienced members' willingness to help coworkers. Previous studies indicate that group structure and individual position along individual attributes (e.g., experience) are important to understand interactions between coworkers. However, sales research on this topic is lacking. Drawing on a motivation-opportunity-ability framework, this study addresses this void by examining the impact of individual salesperson's job experience position within work groups on the motivation to help coworkers and his or her own sales performance. The findings of a multisource, multilevel empirical study reveal interesting effects. The results highlight the important role of job experience position: if a salesperson's level of job experience is common within the sales team, it activates identification as a driver of helping behaviors, which in turn negatively influences own performance. Conversely, if a salesperson's level of job experience is unique, it does not activate identification as a driver of helping, but does positively influence the effect of helping on own performance. The authors discuss implications for theory and practice.     

Supplier evaluation as a new marketing tool

Sales people contacting potential industrial buyers are selling more than just a physical product or a service, they are selling the total benefits offered to the buying firm—the “augmented” product. (P. Kotler, Marketing Management. Prentice-Hall, Englewood Cliffs, NJ, 1976). In today's market, the product benefits that are critical in making a sale are those that a firm adds “to their factory output in the form of packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing, and other things that people value” (T. Levitt, The Marketing Mode. McGraw-Hill, New York, 1969). The salesperson, however, may often err in the presentation of the “augmented” product to the customer due to lack of information on the buyer's needs. These errors are compounded by lack of knowledge about which dimensions of the “augmented” product give the competitive advantage to the firm. This article proposes a new role for supplier performance evaluation that can contribute greatly to the effectiveness of the industrial marketer.