Churchill/Ford/Walker's Sales Force Management

Churchill/Ford/Walker'sSales ForceManagementTenth EditionMark W. JohnstonCrummer Graduate Schoolof BusinessRollins CollegeGreg W. MarshallCrummer Graduate Schoolof BusinessRollins CollegedrawHillMcGraw-HillIrwin

ContentsChapter OneIntroduction to Sales Management in theTwenty-First Century 1PART ONEFORMULATION OF A SALESPROGRAM 28Change Is the Central Theme in Sales ManagementToday 1Learning Objectives 3Sales Management in the Twenty-FirstCentury 3Innovation Fuels Success in Selling Today 4Sales Effectiveness Is Enhanced throughTechnology 5Leadership Is a Key Component in Sales ManagementSuccess 7Sales Management Is a Global Endeavor 8Ethics Underlies All Selling and Sales ManagementActivities 8What Is Involved in Sales Management 9Selling Process 10Sales Management Process 10Environmental Factors Impact Success inSelling 11External Environment 12Economic Environment 12Legal and Political Environment 14Technological Environment 15Social and Cultural Environment: Ethics 16Natural Environment 18Summary: Impact of the External Environment 19Internal (Organizational) Environment 20Goals, Objectives, and Culture 20Human Resources 21Financial Resources 21Production and Supply Chain Capabilities 21Service Capabilities 22Research and Development (R&D) and TechnologicalCapabilities 22Impact of the Environment: The HP Experience 22Summary 23Chapter TwoThe Process of Selling and Buying 30XIIThe Case for a Focus on the Sales Process 30Learning Objectives 31Drivers of Change in Selling and SalesManagement 32Overview of Selling as a Career 33Why Sales Jobs Are So Rewarding 34Key Success Factors in Selling 39Selling Activities 42Types of Selling Jobs 45Selling in Business-to-Consumer versus Business-toBusiness Markets 45Classifying Types ofB2B Sales Jobs 46Stages in the Selling Process 46Prospectingfor Customers 47Opening the Relationship 48Qualifying the Prospect 49Presenting the Sales Message 49Closing the Sale 50Servicing the Account 51Participants in the Organizational BuyingProcess—The Buying Center 52Selling Centers and Buying Centers 53Organizational Buying Decision Stages 54Stage One: Anticipation or Recognition of aProblem or Need 54Stage Two: Determination and Description ofthe Characteristics and Quantity of the NeededItem(s) 56Stage Three: Search for and Qualificationof Potential Suppliers 56Stage Four: Acquisition of Proposals or Bids 56Stage Five: Evaluation of Offerings and Selection ofSuppliers 56Stage Six: Selection of an Order Routine 57Stage Seven: Performance Evaluation andFeedback 58

Contents xiiiThe Nature of Organizational BuyingSituations 58Summary 59Learning Objectives 98The Increasing Importance of Sales OrganizationDecisions 98Purposes of Sales Organization 99Chapter ThreeDivision and Specialization of Labor 99Stability and Continuity of OrganizationalPerformance 100Coordination and Integration 100Linking Strategies and the Sales Rolein the Era of Customer RelationshipManagement 64The Importance of Integrating Sales with OtherBusiness Functions 64Learning Objectives 66What Is Customer Relationship Management? 66From Mass Marketing to One-to-One MarketingCRMProcess.Cycle 70Toward a Relationship-Based Enterprise 71The Importance of Market Orientation72How Market Orientation Affects PerformanceInternal Partnering to Create a MarketOrientation 74The Process of Strategy Development6874Company Mission and Goals 74SBU Strategy 76Role of the Relationship8080Personal Selling in the Relationship EraStage One: Exploration 82Stage Two: Expansion 84Stage Three: Commitment 85Major Account Teams 91Summary92Chapter FourOrganizing the Sales Effort 97Organize the Sales Force around Customers,Not Products 97Vertical Structure of the Sales OrganizationAdditional Sales Organizational IssuesSummary 120Personal Selling's Role in the MarketingCommunication Mix 86Improving Customer Satisfaction and Loyaltythrough Feedback 90Team Selling 113Multilevel Selling 114Co-Marketing Alliances 114Logistical Alliances and ComputerizedOrdering 115116Selling Responsibilities 117Sales-Related Functions 117The Impact of New Technologies 118Staff Support and Outsourcing 11882Company Resources, Goals, and MarketingStrategy 87Characteristics of the Target Market 88Product Characteristics 88Distribution Practices 88Pricing Policies 89Computerized Ordering and Customer Alliances101Deciding on a Company Sales Force or IndependentAgents 101Geographic Organization 105Product Organization 107Organization by Customer Types or Markets 108Organization by Selling Function 109The Role of Telemarketing 109Organizing to Service National and KeyAccounts 11173Personal Selling's Role in Marketing StrategyHorizontal Structure of the Sales Force119Chapter FiveThe Strategic Role of Information in SalesManagement 12689Putting Information Technology intoPerspective 126Learning Objectives 127Using Information in Managerial Decision Makingand Planning 128Introduction to Market OpportunityAnalysis 128Methods of Sales Forecasting 129Subjective Methods of Forecasting 130Objective Methods of Forecasting 133Choosing a Forecasting Method 137Developing Territory Estimates 137

xivContentsPurposes and Characteristics of Sales Quotas 139Purposes of Quotas 139Characteristics of a Good Quota 139Setting Quotas 141Types of Quotas 141Quota Level 142Determining Sales Force Size 143Breakdown Method 144Workload Method 144Incremental Method 147Designing Sales Territories 148Stages in Sales Territory Design 148Sales Analysis for Managerial Decision Making 156Type of Evaluation System 156Sources of Information for Sales Analysis 157Type of Aggregation,of Information to Be Used in SalesAnalysis 159Illustration of a Hierarchical Sales Analysis 161Summary 165Comprehensive Cases for Part One 173Case 1.1The Valley Winery 174Case 1.2Health Care Office Solutions, Inc. 179PART TWOIMPLEMENTATION OF THE SALESPROGRAM 182Chapter SixSalesperson Performance: Behavior, RolePerceptions, and Satisfaction 184The Changing Role of the Sellers 184Learning Objectives 185Understanding Salesperson Performance—WhyIs It Important for Sales Management? 186The Model 187The Role Perceptions Component 187The Aptitude Component 188The Skill-Level Component 188The Motivation Component 189The Personal, Organizational, and EnvironmentalVariables Component 190Rewards 193Satisfaction 193The Salesperson's Role Perceptions 195Stages in Developing the Salesperson's Role 195Stage 1: Role Partners CommunicateExpectations 195Stage 2: Salespeople Develop Perceptions 195Stage 3: Salespeople Convert Perceptions intoBehaviors 196The Salesperson's Role is Vulnerable 197Boundary Position 197Large Role Set 198Innovative Role 198Role Conflict and Ambiguity 200Common Expectations and Key Areas of Conflict andAmbiguity 200Consequences of Conflict and Ambiguity 202Managing Conflict and Ambiguity in aSalesperson 204Role Accuracy 204Nature of Role Accuracy 205Summary 207Chapter SevenSalesperson Performance: Motivatingthe Sales Force 214Salesperson Motivators 214Learning Objectives 216The Psychological Process of Motivation 216Major Components of the Model 217Expectancies—Perceived Links between Effort andPerformance 217Instrumentalities—Perceived Links betweenPerformance and Rewards 220Valences for Rewards 222Can the Motivation Model Predict SalespersonEffort and Performance? 223The Impact of a Salesperson's PersonalCharacteristics on Motivation 224Satisfaction 224Demographic Characteristics 225i'Job Experience 225"" Psychological Traits 226Performance Attributions 227Management Implications 228Career Stages and Salesperson Motivation 228Career Stages 228The Problem of the Plateaued Salesperson 232The Impact of Environmental Conditions onMotivation 235The Impact of Organizational Variables onMotivation 235Supervisory Variables and Leadership 236Incentive and Compensation Policies 237Summary 238

ContentsChapter EightPersonal Characteristics and Sales Aptitude:Criteria for Selecting Salespeople 244The War for Talent 244Learning Objectives 245Are Good Salespeople Born or Made? TheDeterminants of Successful Sales Performance246249Job-Specific Determinants of Good SalesPerformance 259Implications for Sales ManagementSummary 261259Sales Force Recruitment and SelectionThe Real Value of Hiring Good Employees 268Learning Objectives 269Recruitment and Selection Issues, 269Who Is Responsible for Recruiting and SelectingSalespeople? 272Job Analysis and Determination of SelectionCriteria 273Who Conducts the Analysis and Prepares theDescription? 273Content of the Job Description 274Determining Job Qualifications and SelectionCriteria 276Methods for Deciding on Selection Criteria 276External Sources277281Selection Procedures291Sales Training: Objectives, Techniques,and Evaluation 297283Application Blanks 284Personal Interviews 285Physical Examinations 287Tests 287Concerns about the Use of Tests 288Guidelines for the Appropriate Use of Tests 289Equal Employment Opportunity Requirements inSelecting Salespeople 289Increase Productivity 300Improve Morale 300Lower Turnover 300Improve Customer RelationsImprove Selling Skills 301297301The Development of Sales TrainingPrograms 302Creating Credibility in Sales Training 303Training New Sales Recruits 306Training Experienced Sales PersonnelSales Training Topics 308261Chapter NineRecruiting ApplicantsSummaryMilitary Training and Sales SuccessLearning Objectives 298Issues in Sales Training 299Objectives of Sales Training 300Characteristics Sales Managers Look For 249Research Concerning the Personal Characteristics ofSuccessful Salespeople 250Overview of Findings 251Selling Different Types of Products and ServicesDifferent Types of Sales Jobs 260Requirements for Tests 290Requirements for Interviews and Application Blanks 290Chapter TenA Review of Past Research 247The Costs of Inappropriate SelectionStandards 248Characteristics of Successful Salespeoplexv268307Product Knowledge 309Market/Industry Orientation 309Company Orientation 310Time and Territory Management 310Legal/Ethical Issues 311Technology 311Specialized Training Topics 312Sales Training Methods313On-the-Job Training 315Classroom Training 316Electronic Training Methods316Measuring the Costs and Benefits of SalesTraining 317Sales Training Costs 317Measurement Criteria 318Measuring Broad Benefits 319Measuring Specific Benefits 319Recent Trends in Sales Training EvaluationSummary320321Chapter ElevenSalesperson Compensation and Incentives 327Characteristics of Great Sales CompensationPlans 327Learning Objectives 329Overview of Compensation and Incentives 329