Sales Departments External Relations

The sales department has important contact with six main external publics. In the remainder of this chapter, relations with five of these publics are analyzed: final buyers, industry and trade associations, governmental agen­cies, educational institutions, and the press. Because of the uniqueness of the sales department’s relations with intermediaries, discussion of distribu­tive network relations is deferred to the distribution part of the book.

1. Final Buyer Relations

Final buyers, whether ultimate consumers or industrial users, are the most important public that any marketer strives to please. The competitive free enterprise system is based on the premise that customers wants must be sat-isfied; individual companies prosper when their products contribute to this end. An analogous situation exists in politics. If candidates satisfy voters’ requirements and win their confidence, they are elected; if politicians fail to maintain this support, they meet defeat at the polls. Manufacturers and their products are on trial with the final buyer public, but in business, the trial goes on each and every day—not, as in politics, just on election day. Satisfaction, or the lack of it, is recorded daily in sales order books and at the nation’s checkout counters.

Buyer attitudes and behavior patterns, formed over time and crys- talized by experience, are not easily changed. Manufacturers have a competitive edge when they are aware of attitudes and prejudices attach­ing to their products and organization, and know the reasons for them. Research among final buyer groups gathers the information required for planning ways to alter final buyer attitudes and behavior. Research also measures progress toward overcoming prejudices, determines preju­dices against competitors and their products, detects the need for prod­uct improvement, and evaluates intermediaries prestige. Responsibility for good final buyer relations is not the sales department’s alone. If the production department, for example, makes products that fail to meet final buyers’ expectations, unsatisfactory final buyer relations result. In consumer goods fields, personnel policies are part of the consumer rela­tions program, since employees are often customers and have contact with other customers. Dividend and other financial policies affect con­sumer relations, since stockholders and their friends may be customers. When suppliers of industrial products are also customers, final buyer relations are influenced by the seller’s purchasing policies and proce­dures. intermediaries at all distribution levels mold final buyer attitudes toward manufacturers and their products. The effort of all departments need skillful blending with those of intermediaries; in this effort, the sales department plays a key role.

Sales department personnel play major roles in formulating basic product service policies and in implementing them. These policies affect not only final buyer attitudes but the ease with which initial sales are made. For example, guarantees and service obligations should be hon­ored promptly and cheerfully. If products fail to perform in the manner that final buyers have a right to expect, then adjustments, refunds, repairs, or replacements should follow. Instruction booklets should be clear and complete, not cluttered with technical jargon. Final buyers’ requests for service or information should be answered without needless delay. Above everything else, all employees in contact with final buyers should be courteous, friendly, and competent in their jobs.

2. Industry Relations

Although trade associations have different objectives, two are of spe­cial interest to sales executives: (1) to interpret the industry and its problems to outside publics and (2) to encourage member companies to act in the public interest. Activities directed toward the first objec­tive include trade association advertising, furnishing expert witnesses for legislative hearings, and disseminating industry news. Activities directed toward the second objective include studies of attitudes and opinions of final buyers toward the industry and counseling on public relations problems.

Trade associations have other functions meriting the attention of sales executives. Some serve as clearinghouses for industry production and sales statistics useful to individual companies for planning and controlling their activities. Others sponsor employee training programs; conduct management development programs; arrange for or conduct cooperative research; serve as vehicles for reaching the educational, governmental, and press publics; and provide consulting services. Where industry products are in strong competition, with those of other industries, it is not unusual for an association to coordinate advertising and other promotion aimed to stimulate primary demand. Finally, some associations plan, organize, and direct industrywide trade conventions, attended by manufacturers, intermediaries, and sometimes even final buyers.

The sales executive has additional contacts with competi­tors and other business executives through professional and service organizations. Chambers of commerce, manufacturers’ associations, the American Marketing Association, and the American Management Association all furnish sales executives with excellent opportunities to exchange ideas. Participation in local business clubs and service groups is worthwhile. It is not essential to join, but most sales executives find it advantageous, professionally and personally, to maintain as many contacts as time permits.

Proper competitive conduct is difficult to describe, but the rules of common courtesy are good guides. Sales executives, as well as sales per­sonnel, for example, should refrain from making disparaging remarks about competitors and their products. It makes better sense to play up the strengths of one’s own company and its products.

The border line between what is right or wrong, good or bad, moral of immoral, is not clear-cut. Ethical criteria are qualitative and relative, not quantitative and absolute. Many practices are controversial—considered ethical by some, unethical by others. Among these are hiring sales person-nel away from competitors, persuading suppliers not to sell to competitors, cutting prices in the hope of driving competitors out of business, and pay­ing distributors’ or dealers’ employees to push the company brand.

3. Government Relations

Government lays down the rules and regulations under which businesses operate. Rules and regulations affecting the sales department are contin­uously modified with shifts injudicial and administrative interpretations. Effective sales executives are familiar with such basic pieces of legislations and they keep abreast of judicial and administrative interpretations of such laws. Proposed regulatory legislation is also of concern. To protect com­pany and industry interests, they cooperate with, and appear as witnesses before, legislative committees investigating or holding hearings on industry problems and practices.

Many business executives think of government primarily as a source of regulation; for sales executives, other aspects of governmental influence are more important. Federal and state governments affect the size of the market for many products through changing tax laws and rates. Over the past half-century, the effect has been to change the shape of the income distribution curve—relatively speaking, lower economic groups have had their disposable personal incomes raised, and higher groups have had theirs lowered. Most consumer incomes have been rising, and fewer people are in the extremely high, and low-income groups. The average consumer has more disposable income, and this has made possible significant expansions in the markets for many products.

Government influences sales-department operations by controlling credit. Through the Federal Reserve System and the Treasury Department, the federal government has powers to expand or contract credit and thus to affect business conditions and the ease with which sales are made. Changes in the relative availability of credit expand or contract the mar­ket for such “big-ticket items’’ as automobiles, consumer durables, and housing. Credit policy of the federal government, therefore, is of consider­able interest to sales executives in many fields.

Government business is so important to many companies that specialized staffs are formed to negotiate and administer government contracts, and although these staffs may not be wholly under the sales department’s jurisdiction, sales executives have a stake in their perfor­mance. Effective sales executives recognize that the government provides income for millions of consumers—government employees and other mil-lions who receive income from governmental sources, including retired government employees, and holders of government securities. The med­ical insurance programs have brought additional widespread benefits and a major impact on sales of pharmaceuticals, and other health care products.

Many governmental agencies provide services or engage in activities that affect the sales executive. Federal and state governments compile and distribute statistical and other information useful for sales planning. Federal agencies help in promoting standardization of product characteristics. Other governmental agencies protect legitimate business enterprises from commercial shysters and racketeers such as smugglers and bootleggers. From time to time, too, domestic firms find relief and protection from overseas competitors through tariff laws and other import regulations.

Sales executives assist in implementing government relations pro­grams. They expedite the gathering of data needed by governmental statis­tical agencies. They see to it that the communication lines from the sales department to governmental agencies are open and clear.

4. Educational Relations

The sales department has a sizable stake in educational relations. Future members of significant publics, including the final buyer public, receive their first, and usually most lasting, impressions of the business system and individual companies during their years in school. Schools serve as train­ing grounds for future dealers, distributors, sales personnel, and sales exec­utives. The schools are important customers for many products. There are both future and present payoffs in having good relations with educational institutions.

The educational world provides many services to sales executives. Collegiate schools of business, research bureaus and institutes, and indi­vidual instructors conduct studies on relevant problems and make the results available. The expertise of scholars often is brought to bear on problems of direct interest to sales executives, such as application of computer techniques to the design of sales territories and analysis of sales performance. Evening schools and extension divisions provide opportu­nities for developing sales department personnel. Many universities offer management development programs, providing occasions for sales exec­utives to blend their own experiential knowledge with the thinking of scholars.

Sales executives often further the educational relations program. They assist in collecting and preparing teaching materials, and they help educators and students doing research. They recommend that their compa­nies award scholarships, fellowships, and grants-in-aid to educators. They serve as guest speakers in such courses as marketing, sales management, and consumer behavior. Some companies provide summer internships for educators; others work with educational specialists in developing case materials and new research techniques. Company publicity generally is welcomed by the educational public, but the company preparing it should guard against making it overly commercial. Last, effective sales executives accept their responsibilities as public-spirited citizens. They take an active interest in the welfare of the schools and lend support to those seeking to improve the educational system.

One educational relations problem of special concern to sales execu­tives is the widespread lack of student interest in selling as a career. Many students and teachers have unsavory stereotypes of selling positions, and certain selling jobs (e.g., the used-car salesperson) are definitely not role models. Few students and public schools teachers are aware of the non­monetary, let alone the financial, rewards of selling careers. Sales execu­tives concerned with building career interest in personal selling should do their homework. In contacts with students and teachers, they should determine the reasons for negative attitudes toward selling, decide what can be done about them, and act accordingly.

5. Press Relations

The press public consists of writers and editors of newspapers, maga­zines, trade journals, news services, radio and television stations, and other media. Unfavorable media comments about a company, its poli­cies, products, or personnel not only damage a company’s reputation but impede its selling efforts. Bad publicity makes it difficult to make sales and increases the cost of those made. Good publicity makes it possible to obtain sales at less expense.

Good press relations help in obtaining good publicity but will not alone ensure it. Press publicity should be planned as part of the promo­tional program; planned press releases complement or supplement other elements, such as personal selling and advertising. Skill in handling press relations and basic appropriateness of the publicity plan are the factors causing publicity to be good, bad, or indifferent.

Effective sales executives observe a few simple rules in managing press relations. One is that all stories given to the press have news value—a story has news value if it has human interest, or concerns a subject of inter-est to the audience reached. Newsworthy stories originating in the sales department relate to the introduction of new products and improvements, new models, promotional plans, additions to the sales staff, promotions of sales personnel, and retirements. A second rule is that press publicity is not unpaid advertising. Presenting the press with copy that amounts to advertising, which the press calls space grabbing, is a sure road to poor relations.

Pressure, influence, or threats to discontinue advertising if publicity is not obtained are avoided. If a news story is likely to present the company or its product in an unfavorable light, it is better to provide reporters the pertinent details than to ask that the story be suppressed. If interviews are on controversial subjects, or involve material that might be misunderstood, reporters are handed statements covering the situation; in other circum­stances, prepared press releases are avoided.

Effective sales executives maintain an open-door policy with press representatives—all are treated fairly and courteously. Favorable public­ity generated by preferential treatment to some is offset by bad relations incurred with others. The effective sales executive compliments reporters and editors responsible for well-written stories. Building and maintaining good press relations, in other words, is a matter of the sales executive’s exercise of good judgment.

Source: Richard R. Still, Edward W. Cundliff, Normal A. P Govoni, Sandeep Puri (2017), Sales and Distribution Management: Decisions, Strategies, and Cases, Pearson; Sixth edition.