Sales Management

A Global Perspective

John B Ford, Earl Honeycutt, Antonis Simintiras

• Publisher: Routledge
• Year: 2003
• Print ISBN: 9780415300438
• eBook ISBN: 9781134420100
• Topic: Business
• Subtopic: Business General
• Index: Business

As sales managers are encouraged to manage increasingly global territories, the art of selling becomes complicated and the rules of negotiation more diverse. This absorbing book considers the many facets of cross-cultural sales management, to provide salespeople and managers with a guide to making the most of the global sales force. Topics covered include:

* cross-cultural negotiations
* hiring, training, motivating and evaluating the international sales force
* Customer Relationship Management (CRM)
* sales territory design and management.

Included in the book are ten international case studies designed to give sales students, salespeople and their managers an explanation of diverse cultures and the dilemmas, situations and opportunities that arise when selling across borders.

The experienced international authors have brought together the most up-to-date information on the global marketplace - a subject neglected by many other texts. While still tackling sales from a managerial perspective, its cross-cultural approach makes it essential reading for those wishing to succeed in global sales.

Part I
Introduction and culture

Chapter 1
An introduction to managing the global sales force

This first chapter is an introduction to managing the global sales force. It provides new, as well as experienced, students of sales management with key and basic concepts that can be carried with them throughout the remainder of this book.

LEARNING OBJECTIVES

After reading this chapter, you will be able to:

• Appreciate the importance of a global sales perspective for all firms, whether or not their firm is currently pursuing global business.
• Identify forces in the global environment that are moving markets toward greater levels of trade and business.
• List and discuss the three technological forces that are impacting sales force management practices.
• Discuss demographic trends that are impacting the marketplace and, based upon these trends, how customer relationship management must be managed.
• Explain why firms are adopting a relationship management approach with their best customers.
• Understand the importance of economic trends, in various parts of the world, and their impact on the global sales manager.
• Discuss legal and ethical variations that exist in the global economy and their influence on how and where global sales activities are formed.

KEY TERMS

• Globalization.
• Customer relationship management.
• Relationship marketing.
• Foreign Corrupt Practices Act (FCPA).

Managing a sales force today is an extremely complex undertaking. In fact, individuals who become sales managers are expected to bridge gaps that exist between the firm producing or selling the product/service and the customer/client that purchases the product/service. To achieve success, the sales manager engages in the traditional management tasks of planning, implementing, and controlling activities to accomplish organizational goals. Within this complex relationship, the sales manager hires, trains, assigns, motivates, compensates, evaluates, coaches, and leads the sales force. Finally, the sales manager’s chief responsibility is to insure that sales force actions produce satisfied customers that will continue to partner with the sales firm and purchase future goods. It should be apparent that the sales manager’s responsibilities must be performed well and, to perform these duties successfully, the sales manager must work long and full days. This is why sales professionals are among the most sought-after employees.¹

Given these myriad duties and responsibilities, the sales manager of the new millennium must also be concerned about an even larger force. That is, today’s sales managers must be able to manage and lead a sales force in the global marketplace! There are very few economic markets that are not currently impacted by global forces. Even when firms do not pursue customers in the global marketplace they must be prepared to compete against global competitors in home markets. In fact, consumers and industrial firms may not know where a product is made, who owns the parent company, or what role the partner plays that represents the brand in local markets. Therefore, the role of the sales manager is significantly more complex and difficult in today’s marketplace (see Exhibit 1.1).

As one Wall Street Journal article cautioned about managing in a global market, “[T]o be successful, you will have to deal with nationally and culturally eclectic staffs and teams, understand foreign competitors, and devote more time to studying the culture, politics, and operating styles of world markets.”²

SALES MANAGEMENT IN THE GLOBAL ENVIRONMENT

The global marketplace offers numerous benefits and unique opportunities for sales managers. In many parts of the world, and especially in the areas designated as “The Triad,” global marketing has become the norm.³ Research confirms that the majority of world trade either originates or is purchased in: (1) North America (NAFTA); (2) Western Europe; and (3) Japan and the Pacific Rim – hence the name Triad or three major commercial areas of the world. To conduct business successfully in the Triad, sales managers must be aware of and conversant with such diverse subjects as geography, culture, technology, and legal systems, while concurrently understanding mundane topics like currency exchange, international travel expenses, and changing time zones. To be successful, twenty-first-century sales managers must also be fully familiar with the following fast-paced and interrelated forces that are occurring around the globe.

EXHIBIT 1.1 MANAGING AN INTERNATIONAL SALES FORCE

Imagine being a salesperson employed by a Korean firm that had just sold 50 percent of the business to a Western firm. At first, two rumors circulated: (1) that Korean workers would be dismissed to lower the cost of conducting business and (2) that Western managers would not respect former lifetime employment policies. When the foreign managers arrived in Seoul, it was difficult for the Korean sales force to make formal presentations in English and to speak openly with their supervisors. The Western supervisors were less interested in the firm’s hierarchy, seniority, and unswerving loyalty to the boss than their former managers. The Western managers also insisted that Korean salespersons speak openly when asked and to work by well defined rules to achieve clear objectives. These sharp diversions, from the former cultural rules, were at first difficult for the Korean force to practice. Korean salespersons were surprised to learn that the Western managers had their own fears. Managers tried to determine how they could get workers to talk openly about ways to improve the business. One solution that worked was having a Korean manager facilitate discussions at formal meetings. Another concern arose when a ceiling was set on credit sales to customers. This new policy resulted in complaints from customers, and the sales force claimed the policy prevented them from responding to changing market conditions. Finally, after accepting that this was the way business was conducted in Korea, the policy was revised.

Subsequently the Western firm purchased a competitor in order to gain market share. This resulted in workers of the purchased firm going on strike and 40 percent of the customer base being lost. To regain the lost customers once the strike was settled, the Western manager placed a sign in the sales manager’s office that read: “War Room.” Salespersons promised former customers special deals, free beer glasses, and other gifts to return to their former supplier. This strategy worked and nearly all customers reopened their accounts.

Blending workers from the East and West is difficult for all concerned. However, in this case the merger worked well and sales and profits are higher than before the merger. It appears that a large number of Korean workers retained their jobs and may actually prosper because of the merger.

Source. Michael Schuman, “How Interbrew blended Disparate Ingredients in Korean Beer Venture,” Wall Street Journal, July 24, 2000, A1, A6.

CASE VIGNETTE COMPUSTAT AND PACIFIC MARKETING

Compustat, a manufacturer of computer software based in Great Britain, wants to expand sales to the United States. Senior management at Compustat is considering two options: hiring its own sales force that will be comprised of experienced computer salespersons with knowledge of the US marketplace and a successful record of sales accomplishments. A second option would be to find a US partner, with a non-competing product line, to represent its products. Senior management must gather all relevant information about these options, before making a decision about how to best expand its operations.

Jerry Jones, sales manager for Pacific Marketing, must hire a replacement for a retiring salesperson. While most of the sales representatives for Pacific are white males, Jones has seen a significant change in the types of customers and engineers the firm calls upon. A larger portion of purchasing agents and managers are Asian, female, and recent immigrants who possess needed technical expertise. The question that arises is whether the new salesperson should be reflective of the changing customer base? Jones has scheduled diversity training for the sales force and now the question is whether or not to seek out a more diverse sales force for Pacific Marketing.

Globalization

The level of globalization, or interlinking of the world economy through commerce, increases each year. Some firms are threatened by globalization, particularly those companies that are heavy users of labor or that believe they cannot compete directly against larger, better organized, and financed competitors. Conversely firms that are organized to sell their products worldwide embrace globalization. When goods are “world class” global companies can standardize the manufacturing process, increase quality, and drive down total product cost. This means that a global firm could manufacture its product offering(s) in the Philippines, Mexico, and Ireland, sites that are geographically part of Triad customer markets. The firm’s engineering and design work might be conducted in southern California and India to take advantage of creative engineers found in those areas. Operations oversight would occur at headquarters in London. Marketing activities would be the responsibility of local Triad partners. However, it is quite likely that marketing partners in one area of the global economy would be competitors in other markets.

One apparent concern raised by globalization critics is that no one fully understands or controls globalization. Since no one country or organization controls the force of globalization, this suggests that the economic forces at work are free of interference found in other marketplaces. But actions such as outsourcing, moving manufacturing among lower wage countries, and competing on the basis of price and quality, are scary for both less skilled workers in developed nations and for small firms in emerging nations. In response, domestic businesses seek protection from their government in order to reduce global competitors. True globalization, where companies take advantage of efficiencies found around the globe, is an extension of free trade. No matter your perspective on globalization, a number of things appear certain. One is that globalization will continue at a rapid pace and firms can either take advantage of globalization or continually react to the force. Second, given the pervasiveness of globalization, sales managers must plan and strategize from a global viewpoint. Finally, a firm’s success, wealth, and its workers’ standard of living are affected by the firm’s ability to compete in the global marketplace. If a firm is unable – or unwilling – to satisfy global customers, then competitors that are both capable and willing to undertake this responsibility will reap the economic rewards of meeting customer needs.

EXHIBIT 1.2 WHAT GLOBALISM IS (AND ISN’T!)

“Globalism” has almost as many meanings as the number of people who use the term. In examining the way firms and countries use the term, we find a great deal of confusion about what globalism means. For example, companies operating in two countries like Mexico and Brazil may call themselves “global,” when in fact they are “hemispheric.” Also, a consumer goods firm like the San Miguel Corporation may describe globalization as expanding its operations in the Philippines and Hong Kong, to Singapore, Indonesia, and Malaysia. In reality this appears to be a regional focus. Global strategies are important, since trade and technology now link most nations of the world. However, few people, including managers, really understand globalization. Listed below are five “misperceptions” often associated with globalism.

• That offices, factories, or representatives are found in other countries.
• That the product or process is standardized in every country.
• That the firm becomes a stateless entity.
• That country images and values are abandoned.
• That sales operations occur in another country.

So what is “globalism”? According to Harvard Business Professor Rosabeth Moss Kanter, globalism means a firm should be “holistic” in its business approach. That is, a truly global firm takes an integrated approach to all aspects of business, to include suppliers, markets, production locations, and competitors. Every product marketed by the firm is evaluated in regard to domestic and global standards. The needs of global customers are designed into the product, not added as an afterthought. This leads to the firm producing and marketing world-class products both at home and abroad. In the process, managers must acquire a deep and accurate understanding of cultures – both at home and abroad – if they are to become global. The global firm focuses on excellence in the face of a multitude of possible global scenarios, assesses the synergies available across markets and partners, and is aware of the important cultural differences that exist. In effect, global thinking is more important than global selling, because the thou...

Table of contents

• COVER PAGE
• TITLE PAGE
• COPYRIGHT PAGE
• FIGURES
• TABLES
• EXHIBITS
• FOREWORD
• A GUIDE FOR THE READER
• ACKNOWLEDGMENTS
• PART I: INTRODUCTION AND CULTURE
• PART II: GLOBAL PERSONAL SELLING
• PART III: GLOBAL HUMAN RESOURCES
• PART IV: GLOBAL STRATEGIC MANAGEMENT ISSUES
• APPENDIX: SELECTED CASES