Management of a Sales Force PDF
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Management of a Sales Force Management of a Sales Force Twelfth Edition Rosann L. Spiro Indiana University Gregory A. Rich Bowling Green State University William J. Stanton University of Colorado Boston Burr Ridge, IL Dubuque, IA New York San Francisco St. Louis Bangkok Bogotá Caracas Kuala Lumpur Lisbon London Madrid Mexico City Milan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto MANAGEMENT OF A SALES FORCE Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 CCW/CCW 0 9 8 7 ISBN 978-0-07-352977-6 MHID 0-07-352977-X Editorial director: John E. Biernat Publisher: Andy Winston Editorial assistant: Kelly Pekelder Associate marketing manager: Daniel Wiencek Project manager: Gina F. DiMartino Manager, New book production: Heather D. Burbridge Lead designer: Matthew Baldwin Lead media project manager: Cathy L. Tepper Cover design: Studio Montage Cover Image: ©Getty Images Typeface: 10/12 Century Schoolbook Compositor: Techbooks Printer: Courier Westford Library of Congress Cataloging-in-Publication Data Spiro, Rosann L. Management of a sales force / Rosann L. Spiro, Gregory A. Rich, William J. Stanton. — 12th ed. p. cm. Includes index. ISBN-13: 978-0-07-352977-6 (alk. paper) ISBN-10: 0-07-352977-X (alk. paper) 1. Sales management. I. Stanton, William J. II. Rich, Gregory A. III. Title. HF5438.4.S78 2008 658.8'1—dc22 2006032619 www.mhhe.com To: Rockney, Linda, and Imma Preface This Book—Geared for Changing Times The new edition of Management of a Sales Force is coming out as sales or- ganizations must deal with unprecedented change. The age and ethnic mixes of the population of the United States are changing considerably;the population is getting older and less white.Many Americans are part of a mi- nority group.People’s values are changing as we show more concern for our social and physical environments and our overall quality of life. Recent business scandals have led us to demand that leaders in government,busi- ness,and other institutions adhere to higher standards of ethical and social responsibility than in the past.More and more,businesses are internation- ally oriented,buying from and/or selling to the global markets.This is be- cause the U.S.market has reached the saturation point for many consumer and industrial products, but new markets such as eastern Europe and China have opened up. European,Asian, and U.S. trade agreements have made it easier for companies to sell products and services in Europe,Asia, Central and South America,and Canada.Growth for many American com- panies in the future will come from the Asian, European, and South and Central American markets. At the same time, competition in the United States from foreign competitors has greatly intensified. New developments in communication and information technology are changing our everyday lives and our business practices. Most salespeople now use customer relationship management systems—also known as sales force automation programs—to assist them in serving their customers,and most sales managers use computer technology to assist them in managing their salespeople.Customers too are using new technologies,such as the In- ternet,to assist them in gathering product information and in making pur- chase decisions.Today’s customers demand higher quality and greater levels of service. As a result of these economic and competitive pressures and the social and cultural changes, companies are being forced to become more market oriented—more responsive to the customer.The role of the sales force is ex- panding greatly.The salesperson of today is a professional who is as much a marketing consultant as a salesperson.These new salespeople are engaged in consultative relationships with their customers. They are expected to solve customer problems, not just sell products.Their focus is on building long-term relationships with their customers.In many cases,companies re- spond to their customers’ needs by using selling teams rather than a single salesperson. As the nature of personal selling changes, so does the role of the sales manager. Today’s sales managers are viewed as team leaders rather than bosses.They empower and collaborate with their salespeople rather than con- trolling and dominating them.Managers in this century are being asked to vii viii PREFACE manage multiple sales channels such as telemarketing and electronic mar- keting as well as field salespeople.They also are assuming a greater respon- sibility for directing and coordinating the marketing efforts of their firms. Your career success will depend greatly on your ability to adapt to the environmental challenges and changes that will occur throughout the com- ing decade.The contents of this book can be valuable to you because you will use the knowledge contained in your sales course fairly immediately. Within a very few years,many of you may well be some type of sales force manager, perhaps at a district level. Even as salespeople, you may be called on to use material covered in this book. The year following your graduation, you may come back to your alma mater as a member of your firm’s employee recruiting team.Or you may be called on for suggestions regarding a proposed compensation,expense,or quota plan.We wrote this book to help make the transition from college to a professional selling career easier for you. What’s New in This Edition The 12thedition has been substantially revised to reflect the many dramatic changes that are affecting today’s sales force managers.Customers have be- come exceptionally demanding.Technology is advancing rapidly.Globaliza- tion is an ongoing trend,resulting in intense competition.The chapters have all been updated with current company examples that demonstrate how the best sales executives are adapting to this new business environment.In ad- dition,the authors conducted a comprehensive search to find all the latest sales management research,and then presented these studies and reports in a straightforward,easy-to-read manner.In fact,Management of a Sales Force,12th edition,is by far the most currentsales management textbook on the market. A few select chapters have had major overhauls. For example, Chap- ter 7,“Developing,Delivering,and Reinforcing a Sales Training Program,” has been totally rewritten to reflect the latest changes in training.This in- cludes training in two areas:(1) growth-related knowledge,skills,and abili- ties, such as creativity training, coping skills, and emotional intelligence, and (2) meta knowledge,skills,and abilities, such as a learning orientation and self management skills.Further,a panel of experts reviewed this book and suggested a greater focus on how sales organizations use sales quotas.In response,the authors present a detailed discussion of sales quotas in a new Chapter 10. In Chapter 2,there is a new presentation of the history of selling in the United States,which is then related to the evolution of marketing manage- ment.In the recruiting and selection chapters,there is an expanded discus- sion of minority recruitment, a new presentation of traits of successful salespeople,updated information on the validity of selection tools,and new coverage on the latest techniques of salesperson selection interviews.When discussing sales territory design,the authors present recent research on the negative consequences of unbalanced territories.There is expanded discus- sion of how international companies organize their sales force through global account management. In fact, the book has several new “International ix PREFACE Perspectives”boxes discussing the impact of global issues on various strate- gic sales management issues. Technology topics continue to be a major emphasis in Management of a Sales Force and,thus,have been updated throughout the 12th edition.For example,the book has extensive and recurring discussions on how the im- plementation of customer relationship management systems impacts strate- gic planning,profitability analysis,individual evaluation,and other facets of selling and sales force management. Other updated technology issues in- clude the latest on Internet selling,virtual offices,Web-based recruiting and training,and discussion of how salespeople use both virtual presentations and instant messaging in the sales process. The cases have always been a strength of this book. Approximately 25percent of the cases are new,and thus delve into the most contemporary sales force management issues. This includes a series of new cases on Dasher Orthopedics,a fictional company portrayed to be one of the world’s leading designers,manufacturers,and suppliers of orthopedic devices and supplies. Dasher’s sales manager, Ms. Maggie Sprunger, and her sales force are introduced in Chapter 4,and the cases continue throughout the book.In addition,each chapter has two to four cases that focus on specific issues related to the content. Finally, there are six longer, integrative cases in an appendix at the end of the book.The accompanying case-by- chapter grid indicates the chapters for which cases are most appropriate. Several of the cases have data that are available on a supplementary Excel spreadsheet. Many new figures,boxed materials,and other graphics have been added to make the book more readable and understandable. Toward the end of each chapter,the Internet exercises have been updated.These supplement the experiential exercises that also appear at the end of the chapters.Many new company examples illustrate the principles discussed in the text,and a company index has been added that lists these companies for increased awareness and easy references.The authors also have developed PowerPoint slides that illustrate many of the principles discussed in the text.These are available as transparency masters as well. Structure of This Book Those who are familiar with the earlier editions will find that we have re- tained the features that have made this text an outstanding teaching and learning resource.The writing style continues to make the book clear and in- teresting to read.The section-heading structure makes for easier reading and outlining. We still have the excellent end-of-chapter discussion ques- tions.Most of these questions are thought provoking and involve the appli- cation of text material,rather than being answerable right out of the book. The issue-oriented cases provide an opportunity for problem solving and de- cision making,rather than being simply a vehicle for long-winded discussion of a company’s action. We also have retained the basic scope and organization that have made this book the market leader in the sales management field for over 20 years. With respect to its scope, this book still is concerned specifically with the x PREFACE management of an outside sales force and its activities. Because outside salespeople—those who go to the customers—are distinguished here from over-the-counter salespeople to whom the customers come, the book deals largely with the management of sales forces of manufacturers and whole- saling intermediaries.Thus,the scope of this book does notinclude any sig- nificant treatment of the broader fields of marketing management. The 12th edition continues the real-world approach that has success- fully characterized previous editions.Students who learn from this book can talk to sales executives in the business world,and sales executives appreci- ate the material in this book.In fact,this book has been used in many exec- utive development programs for sales managers. The text is divided into five main parts: 1. Introduction to sales force management.The three chapters in this section set the scene for the rest of the book.Chapter 1 covers the na- ture,scope,and importance of personal selling and sales force manage- ment. This opening chapter also sets forth our basic managerial philosophy,which permeates the entire book.We believe that staffing— the selection of personnel at any level in organization—is the most im- portant function of administrators. In Chapter 2, we discuss strategic planning and the role of sales force planning as it relates to marketing planning and total-company planning.Chapter 3 presents the steps in the personal selling process. 2. Organizing,staffing,and training a sales force.Part 2 (Chapters 4 to 7) covers the first steps in operating a sales force.The major types of sales organizational structures and additional strategic organizational alternatives are treated in Chapter 4.The tasks of recruiting,selecting, hiring,and assimilating salespeople are discussed in some detail over the next two chapters.The development of a sales training program is the topic of Chapter 7. 3. Directing sales force operations.In this part (Chapters 8 to 11),we continue our discussion of operating a sales force.We start with the con- ceptual and practical aspects of sales force motivation.Another chapter is devoted to compensating a sales force,followed by a chapter on sales force quotas and expenses.We conclude Part 3 with a discussion of sales force leadership. 4. Sales planning. This part (Chapters 12 and 13) begins with an expla- nation of why we place sales planning after sales operations in the book. Part 4 covers sales planning activities, starting with sales forecasting and developing budgets. Then we discuss the design and coverage of sales territories. 5. Evaluating sales performance. The final stage in the management process of planning–implementation–evaluation is covered in Part 5 (Chapters 14 to 17).This part includes a sales volume analysis of an organization’s total sales performance, a marketing cost and prof- itability analysis,and an evaluation of the performance of individual salespeople. The final chapter is a macro-evaluation of sales force management in which we discuss ethical and legal responsibilities fac- ing sales managers.
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