D099 WGU Sales Management

Functional relationships

Limited, ongoing relationships that develop when a buyer continues to purchase a product from a seller out of habit, as long as its needs are met

Modular structure

Divides the business into small, tightly knit strategic business units (SBUs), which focus on specific elements of the organizational process

Value chain

The process or activities by which a company adds value to a product, including production, marketing, and the provision of after-sales service

Strategic business units (SBUs)

A profit center that focuses on product offering and market segment

Sustainable competitive advantage

Company assets, attributes, or abilities that are difficult to duplicate or exceed and provide a superior or favorable long-term position over competitors

Factors that can help a business develop a sustainable competitive advantage

Customer loyalty, location, distribution and information systems (Getting products at a cheap price and selling them at a reasonable price), unique merchandise, vendor relations, customer service, and multiple source advantage (being widely recognized by your strengths)

Business intelligence (BI)

The use of data in an enterprise to facilitate decision-making

Big data analytics

Large, complex data sets that require non-traditional data processing software to predict trends and forecasts

Four elements that make up ethical behavior within an organization

A written code of ethics and standards. Ethics training to executives, managers, and employees. Availability of advice on ethical situations (advice lines or ethics offices). A system for confidential reporting.

Integrated marketing communications (IMC)

The careful coordination of all promotional activities—media advertising, sales promotion, personal selling, and public relations, as well as direct marketing, packaging, and other forms of promotion—to produce a consistent, unified message that is customer focused

Marketing concept

Identifying consumer needs and then producing the goods or services that will satisfy those needs while making a profit for the organization

Promotional techniques

Advertising, sales promotion, and publicity, or creating new sales channels or new products

Promotional mix

The combination of advertising, personal selling, sales promotion, and public relations used to promote a product

The main limitation of the AIDA model

The model assumes consumers are passive and marketers are active during most of the buying process.

What is the main difference between the AIDA model of the buyer's journey and the six steps model of the buying process?

The AIDA model assumes that the customer experience ends at the purchase while the six-step process considers the after-purchase relationship with the customer.

Transactional selling

Focuses on short-term, often single, transactions.

Relationship selling

Focused on long-term relationship building to keep customers satisfied and consequently convince them to return and make multiple purchases.

Adaptive selling

Using social styles to customize a sales approach to the specific customer

Social style matrix

A model that categorizes people according to personality traits and how they interact with others

Analyticals

Focus on "how,"include facts, do not challenge their facts, demonstrate results, mention guarantees and warranties, give them time to decide, communicate the pros and cons, and provide history, data, financial details. Low responsiveness and low assertiveness

Drivers

Focus on "what," get to the point quickly, provide options, use facts, focus on results, provide timelines, and make them feel in control. Low responsiveness and high assertiveness

Amiables

Focus on "why," establish a personal relationship, demonstrate personal commitment, and work as a team. High responsiveness and low assertiveness

Expressives

Focus on "who," take extra time to discuss everything, give them recognition and approval, ask them how they feel about the product or service, focus on the big picture, and use facts and figures to demonstrate what is possible. High responsiveness and high assertiveness

Consultative selling

Sales approach where the seller becomes a trusted advisor to the customer and builds a relationship to truly understand his or her needs

Customer lifetime value (CLV)

A prediction of the net profit attributed to the entire future relationship with a customer

Return on customer investment

A metric that measures how much value a business can create per customer

Value proposition

An innovation, service, or feature intended to make a company or product attractive to customers

A value proposition should be

Clear (short and direct), compelling (motivates), and differentiating (sets the offering aprt).

Equation for ROI

ROI = net profit ÷ investment × 100

Return on investment (ROI)

A performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments

Equation for CLV

CLV = dollar value of purchases x gross profit percent x number of purchases

Sales channels

A way of bringing products or services to market so they can be purchased by consumers

Distribution channels

A chain of businesses or intermediaries through which a good or service passes until it reaches the final buyer or the end consumer

Agents or brokers

Their main job is to represent the producer to the final user in selling a product.

Wholesalers

They sell the products to other intermediaries, such as retailers, for a higher price than they paid. They buy in bulk and store the products in their own warehouses and storage places until it is time to resell them. They are independently owned, and they own the products that they sell.

Distributors

They take ownership of the product, store it, and sell it at a profit to retailers or other intermediaries. However, the key difference is that distributors ally themselves to complementary products

Retailers

Whatever their size, retailers purchase products from market intermediaries and sell them directly to the end user for a profit

Missionary salespeople

A salesperson who provides information to an individual who will influence the purchase decision

Technical salespeople

Sales people who are experts in a specific product or service area. They promote and sell the product by demonstrating how it works along with the benefits it can offer potential customers

Trade salespeople

A salesperson who calls on retailers and helps them display, advertise, and sell products to consumers

Inside salespeople

People who routinely work inside the business taking orders and handling transactions

Outside salespeople

Sales personnel who go out into the field to meet with customers

Account management

Maintaining a long-term relationship with customers who purchased from the firm in the past

Account-based marketing (ABM)

Concentrates sales and marketing resources on a clearly defined set of target accounts within a market and employs personalized campaigns designed to resonate with each account

Key account management (KAM)

Developing and maintaining long-term, sustainable and mutually beneficial relationships with key accounts (customer)

Inactive accounts

Clients who have not made a purchase for a specified period of time

Active accounts

Have consistent transactions and engagement with the business

Passive accounts

Clients who have established an ongoing relationship with the company through its website and may or may not have a recurring order

80/20 rule

Suggests that 20 percent of your activities will account for 80 percent of your results

Pareto principle

The law of the vital few, or the principle of factor sparsity, states that, for many events, roughly 80 percent of the effects come from 20 percent of the causes

Business development

Activities to develop and implement growth opportunities within organizations

Sales quotas

The sales goal or figure set for a product line, company division, or sales representative

Power skills

Personal attributes that enable someone to interact effectively and harmoniously with other people

Hard skills

Teachable abilities or skill sets that are easy to quantify. Typically, you will learn hard skills in the classroom, through books or other training materials, or on the job

Types of power skills

Empsthy, verbal communication, conflict resolution, and analytical decision making

Types of hard skills

Product knowledge, proposals and contracts, technology proficiency, and software skills

Economic buyer

The individual decision maker or group within the customer organization who controls the budget and writes the checks for new product purchases

Infrastructure buyer

Someone who makes sure that purchasing rules defined in corporate governance procedures are followed

User buyer

Someone who influences the buying decision as the person who will actually use the solution after the purchase decision is made

Procurement officers

Persons who are responsible for the management, administration, and supervision of the company's acquisition programs

Merchandisers

A staff member in a retail firm who is responsible for buying goods or products and displaying them in the store

Influencers

Individuals who have experience or expertise that can help improve the buying decision

Initiators

Individuals who suggest purchasing a product or service for a business

Users

Individuals within an organization who actually use the product

Gatekeepers

Individuals who will decide if and when one gets access to members of the buying center

Decision makers

The person who makes the final purchasing decision

Purchasing managers

An employee within a company, business or other organization who is responsible at some level for buying or approving the acquisition of goods and services needed by the company

Decision-making unit (DMU)

A group of people within an organization who make business purchasing decisions

Selling centers

Functional representation that supports a sales person to create a team-selling approach

Buying centers

A group of people within an organization who make business purchasing decisions

Stages of B2B buying process

Recognize the need, define the need, search for suppliers, bid analysis, supplier selection, order placement, and performance review

Recognize the need

Someone recognizes that the organization has a need that can be solved by purchasing a good or service

Define the need

Involves users as well as initiators to put more definition around the type of product or service that will help meet the need and create the product specifications

Search for suppliers

People involved in the buying process seek out information about the products they are looking for and the vendors who can supply them.

Bid analysis

Qualified suppliers are asked to complete responses to requests for proposals

Supplier selection

The RFPs are reviewed and the vendor or vendors selected

Order placement

Stage in which the actual order is put together

Performance review

Just as consumers go through an evaluation period after they purchase goods and services, so do businesses

Producers

A company that purchases parts, products, or ingredients to produce other goods and services to sell to other companies or consumers

Resellers

A company that buys finished goods to sell, lease, or rent to other companies or consumers

Value-added resellers (VARs)

A reseller that adds features or service to an existing product and sells it

Organizations

A government agency or nonprofit group that purchases products or services to serve or sell to its constituents

Micropurchases with credit cards

These are purchases under $3000, which do not require competitive bids and a procurement officer

Simplified acquisition procedures

These are purchases under $150,000

Sealed bids

When governments have very specific requirements for a product or service, agencies will issue an invitation for bid (IFB)

Contracting by negotiations

The government will issue an RFP when it requires a highly technical product or service that exceeds $150,000.

Consolidated purchasing vehicles

Everyday purchasing needs

Prime contractors

Those that hold a government vetted contract directly

Subcontractors

Sellers that do business with another company that holds the direct contract with the government

DUNS number

The Data Universal Numbering System. A unique, nine-digit identifier that is issued and maintained by Dun & Bradstreet

Straight rebuy

The duplicate purchase of the identical goods in the identical amount under the identical terms from the identical supplier

New task purchase

A business buying situation in which the buyer purchases a product or service for the first time

Modified Rebuy

A buying situation in which an individual or organization buys goods that have been purchased previously but changes other element of the previous order

Individual Factors

B2B decisions are influenced by characteristics of the individuals involved in the selection process

Organizational Factors

Purchasing decisions, especially big-ticket expenditures, may be influenced by the organization's strategies, priorities, and performance

Business Environment

B2B purchasing is also influenced by factors in the external business environment

Opinion leaders

Influential members of a community, group, or society to whom others turn for advice, opinions, and views

Functional structure

An organization structure that groups employees according to a specialized or similar set of roles or tasks

Affiliative selling relationships

A situation where the buyer needs extensive expertise from the seller to make a decision

Strategic partnerships

A partnership in which the buyer and seller commit resources to generate growth for both parties