Foundations in sales and marketing

Foundations in sales and marketing - Level 2.0 MARKETING...

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Level 2.0  HIGHER DIPLOMA IN SALES AND  MARKETING                                  Higher Diploma in Sales and Marketing 1
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Module Module 8   BUSINESS ENVIRONMENT Module 8 Business Environment Content Content 1 THE ORGANIZATION 3 Organization and compensation 3 Marketing organization 13 Marketing implementation 29 Strategic control 40 2 THE MICRO ENVIRONMENT 44 The company’s microenvironment 45 The social responsibility of managers 54 3 THE MACRO ENVIRONMENT 65 The marketing environment 65 Demographic environment 96 4 THE GLOBAL ENVRONMENT 109 Business markets 109 Institutional and government markets 121 International management and multinational corporation 13Module 8 Higher Diploma in Sales and Marketing 2
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Module 8 Business Environment 1 The Organization ORGANIZATION AND COMPENSATION Organizational structure Perhaps the classical form of organizing a sales force is along geographical lines, but the changing needs of customers and technological advances have led many companies to reconsider their sales force organization. The strengths and weaknesses of each type of organizational structure as indicated below will now be examined. Geographical structure An advantage of this form of organization is its simplicity. Each sales person is assigned a territory over which to have sole responsibility for sales achievement. His or her close geographical proximity to customers encourages the development of personal friendships, which aids sales effectiveness. Also, compared with other organizational forms, e.g. product or market specialization, traveling expenses are likely to be lower. A potential weakness of the geographical structure is that the sales person is required to sell the full range of the company’s products. They may be very different technically and sell into a number of diverse markets. In such a situation it may be unreasonable to expect the sales person to have the required depth of technical knowledge for each product and be conversant with the full range of potential applications within each market. This expertise can only be developed if the salesperson is given a more specialized role. A further related disadvantage of this method is that, according to Moss, sales people in discrete geographical territories, covering all types of customer, are relatively weak in interpreting buyer behaviour patterns and reporting about changes in the operational circumstances of customers compared with sales people organized along more specialized lines. Product specialization structure One method of specialization is along product lines. Conditions which are conducive to this form of organization are where the company sells a wide range of technically complex and diverse products and key members of the decision-making unit of the buying organizations are different for each product group. However, if the company’s products sell essentially to the same customers, problems of route duplication (and hence higher travel costs) and customer annoyance can arise.
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