MAR 4418 UCF Chapter 4

Organization

An arrangement or working structure of activities involving a group of people where they can act better together than individually.

Characteristics of a Good Organization

Reflects a marketing orientation, built around activities (not people), responsibility matches authority, reasonable span of control, stable but flexible, and activities are balanced/coordinated.

Span of Control

The average number of salespeople who report to each manager; the U.S. average is 10 to 12 reps per manager.

People Management

A task of sales managers that includes hiring, supervising, coaching, and conducting performance reviews.

Customer Management

A task of sales managers that includes account planning, customer visits, and accompanying salespeople on their calls.

Business Management

A task of sales managers that includes time spent on budgeting, sales meetings, and administrative requirements.

Informal Organization

Represents how things actually get done in a company, outside of the formal organization chart.

Citizenship Behaviors

"Good" informal behaviors; voluntary, altruistic actions not part of formal job requirements that promote effective organizational functioning (e.g., mentoring junior reps, celebrating birthdays, organizing team events).

Line Organization

The simplest structure where authority flows downward in a straight line; features quick decision-making and no dispute over the boss, but is oversimplistic and typically used only for very small organizations.

Line-and-Staff Organization

The most widely used structure; allows for division of labor and specialization where staff executives (e.g., Market Research Manager) have advisory authority (dotted line) rather than formal authority.

Functional Organization

Similar to line-and-staff, but staff advisory authority becomes formal authority (solid line); a major drawback is salespeople can receive contradictory demands from different managers.

Horizontal Organization

A trending, flatter structure focused on self-managed, cross-functional teams giving customers direct access to a team of specialists; a drawback is that it can be difficult to reach decisions when everyone has the same level of authority.

Geographic Specialization

Salespeople are assigned a defined territory and sell all products to all customers within it; ensures market coverage but lacks specialization of marketing activities (best for short product lines).

Product Operating Specialization

Salespeople are assigned to a subset of products and sell to all types of customers; creates product experts and is best for complex or wide product lines.

Product Staff Specialization

Salespeople sell all products to all customers, but each product line is supported by a specialized product manager; best for companies with highly visible brands that need dedicated support (like P&G).

Market Specialization

Salespeople sell all products, but only to a subset of specific customer types or industries; allows reps to become industry or market experts (best when there is great heterogeneity between customer groups).

Strategic Account Management (SAM)

Also known as Key Account Management (KAM) or Global Account Management (GAM); a specialization structure where large, highly important customers receive the full attention of a specific salesperson or team (e.g., PepsiCo employees solely dedicated to Walmart).

Buying Center

All the individuals from the customer firm involved in the purchasing decision process (Initiators, Users, Influencers, Deciders, Gatekeepers, Buyers).

Customer Journey

The process by which B2B buyers experience value, mirroring consumer behavior: Consider, Evaluate, Buy, Loyalty Loop (Enjoy, Advocate, Bond), and New Journey.

Selling Team

A group representing the sales department and other functional areas in the firm (finance, production, R&D) used to call on various individuals in the buying center.

Selling Centers

A separate location established by some companies where their sales teams can meet with the customer's buying teams.

Independent Agents (Manufacturers' Reps)

Wholesaling intermediaries that sell for several manufacturers of related (but non-competing) products, do not take ownership title, and are paid on straight commission.

Wholesale Distributors

Independent intermediaries who take ownership title to the products they sell and carry physical inventory stocks.

When to Use Independent Reps

Highly economical when sales volume is low (e.g., beginning of the product life cycle) or when a company wants to enter a new market rapidly, as they have a fixed cost-to-sales ratio.

Captive Sales Force

A firm's own direct, full-time employee salespeople; more economical at high sales volumes because their variable cost-to-sales ratio decreases as volume rises.

Inside Sales (Telemarketing)

Salespeople who contact customers via telephone and seldom make face-to-face calls; often used to support direct field salespeople and increase selling efficiency.

E-Commerce

Interacting with customers electronically over the internet for communication and commercial transactions; sometimes preferred by buyers for routine reorders.

Options for International Sales

1. Turn over export to home-country intermediaries, 2. Partner with foreign-country intermediaries, or 3. Establish its own company sales force in the foreign country.

Hiring for a Foreign Sales Force

When establishing a company sales force abroad, the decision to hire foreign host-country salespeople versus relocating American salespeople depends heavily on 1) the cultural similarity between the two countries, and 2) the complexity and innovativeness of the product.

Sales Enablement

A strategic deployment of resources that aids in value creation through the coordination of existing processes (like HR, CRM, and marketing-sales alignment).