Strategic development of a Sales force leadership model. The Sales force of the Meusburger Company


Master's Thesis, 2008

74 Pages, Grade: 1,0


Excerpt

Table of content

1 INTRODUCTION

2 APPROACH
2.1 SRESEARCHITUATION ANALYSIS
2.2 SOLUTION OF THE PROBLEM
2.2.1 Primary research
2.2.1.1 Internal published documents and general knowledge
2.2.2 Expert interviews
2.2.2.1 Type of interview
2.2.2.2 Framing the interview
2.2.2.3 Interpreting the interview
2.2.2.4 Ethical considerations
2.3 SECONDARY RESEARCH
2.4 CONCLUSION - GAP ANALYSIS

3 SITUATION ANALYSIS OF THE MEUSBURGER COMPANY
3.1 ABOUT MEUSBURGER
3.2 SECTOR & ENVIRONMENT
3.2.1 Arrangement of the industrial sector
3.3 DEFINITION OF THE SALES PROCESS
3.4 OVERVIEW OF THE MEUSBURGER SALES FORCE
3.4.1 Hierarchy of the sales force
3.4.2 Sales training
3.4.3 Sales controlli
3.4.4 Leading the sales forc
3.5 ANALYSIS OF THE WEAKNESSES AND THREATS AS A PART OF A SWOT
3.5.1 Weaknesses
3.5.2 Threats
3.6 CONCLUSIONS OF THE ANALYSIS

4 OBJECTIVES
4.1 WHAT DEFINES A GOOD SALES FORCE
4.1.1 Evaluation of a sales force
4.1.2 Management and leadership.
4.1.3 Motivati
4.1.4 Management by Objectives
4.1.5 Compensatio
4.1.6 Traini
4.1.7 Structure of a sales force
4.2 COMPARISON ANALYSIS TO MEUSBURGER

5 STRATEGY
5.1 RESTRUCTURING THE SALES FORCE
5.2 COMPOSITION OF A TRAINING CONCEPT
5.3 DEVELOPMENT OF A MANAGEMENT CYCLE - THE AUTHORS CONTRIBUTION TO KNOWLEDGE

6 TACTICS / ACTION / CONTROL
6.1 RESTRUCTURING THE SALES FORCE
6.2 COMPOSITION OF A TRAINING CONCEPT
6.3 DEVELOPMENT OF A MANAGEMENT CYCLE

7 CONCLUSION

8 BIBLIOGRAPHY
8.1 LITERATURE
8.2 INTERNET

9 APPENDIX

List of figures

Fig. 1: Meusburger products (Meusburger, 2008)

Fig. 2: Overview of the Meusburger sales force (Meusburger, 2008)

Fig. 3: Meusburger sales force hierarchy (Meusburger, 2008)

Fig. 4: Overview of the Meusburger weaknesses (own composition)

Fig. 5: Overview of the Meusburger threats (own composition)

Fig. 6: The sales force evaluation process (Jobber et al., 2003, p.444)

Fig. 7: Sales force Motivation (Jobber et al., 2003, p.370)

Fig. 8: Stages of training (Noonan, 1998, p.169)

Fig. 9: Geographical sales force structure (Johnston; Marshall, 2006, pp.115)

Fig. 10: Development of objectives (own composition)

Fig. 11: New sales force structure (own composition)

Fig. 12: Meusburger sales force mgmt cycle model (own composition)

Fig. 13: Time chart for the developed actions (own composition).

1 INTRODUCTION

According to Hoppen (1999, pp.121), the field sales force of a “business to business” company is a very difficult division to be lead and structured in a company. The challenge consists of two factors: The external sales agents are not working in the office and therefore can’t be lead directly by the management. They are mostly working in the field, in some cases hundreds of kilometres afar from the management. On the other hand most sales people in the field are accustomed to their personal freedom and their personal habits and don’t want to be controlled by someone else.

Meusburger Standard Moulds situated in Austria is on the step to becoming a big enterprise. With a turnover growth of over 10 % annum in the last 40 years (turnover 2007 of € 73 millions) and nowadays 29 external sales agents (total 260 employees), the sales force has to be structured and lead in a professional way to optimise output.

Meusburger is working in nearly all countries within Europe and has several sales people on different locations in each country. Head of the sales force is the sales force manager, who has been working since 30 years as a sales agent. But because of big growth, this single person is not able any more to handle and lead all of the sales agents alone.

The aim of the following master project work is to analyse the relevant sales force management theory and so develop a management cycle for the sales force of the Meusburger Georg GmbH & Co KG in Wolfurt, Austria. The structure of the work is developed around Paul Smiths SOSTAC model (Smith; Berry; Pulford, 1999, p.175):

- Situation analysis: Analysis of the Meusburger sales force
- Objectives: Define, “what defines a good sales force” out from literature Æ Definition of objectives for the Meusburger sales force
- Strategy: How can the objectives are achieved?
- Action / Tactics / Control: Some key recommendations are defined for the implementation of the management cycle

The main part of the following work will be concentrated on SOS out of the SOSTAC model, more on the strategy than on the operative implementation. The operative part will be a further project in the authors’ responsibility within the company.

The author works as a marketing manager for Meusburger; he is the person in charge of sales controlling and the development of the sales force beneath the head of sales.

2 RESEARCH APPROACH

2.1 SITUATION ANALYSIS

The aim of the masters’ project with the title „Strategic development of a sales force leadership model” is to explain and establish a new leadership system for the Meusburger sales force. This is a very practical related project. Basically, it must be considered that there are already experienced experts in the sense of management and leadership working in the company. The researcher himself is a manager who has different leadership functions and experiences too.

Furthermore, it has to be considered that there is much relevant literature available on this topic, but the leadership in a company follows always the companies own way and culture.

It is not possible to use general working directives in the sense of leadership. Although there exist some successful methods in the literature, the leadership way has to be defined in each company after the existing values, targets, branches and customers who are served and of course the culture and people of the company.

2.2 SOLUTION OF THE PROBLEM

As stated above, the project work is very practical oriented. On the one hand, it is necessary to use primary research which is showing information directly from the company and the research subject. On the other hand, secondary research out from literature concerning general knowledge has to be used.

2.2.1 Primary research

After the first literature research, the practical situation of this practice related topic has to be investigated.

According to Preece (1996, p.80) primary sources are understood as the essence of information that involves the researcher in direct experience and observation of the real world.

Based on an authentic collection of data through the qualitative research, this method will be used because this authentic collection would be lost through quantitative research (Mayer, 2002, pp.24).

After Denzin and Lincoln (2000, p.8), the qualitative research investigates “qualities of entities and on processes and meanings that are not experimentally examined or measured in terms of quantity, amount, intensity, or frequency”. In comparison to the qualitative research, the quantitative research measures and analyses causal relationships between variables, not processes.

So the qualitative research should deliver exactly the facts which the author needs to know:

- How should sales people in the field be lead?
- What is important according to the older, experienced people in the sales force?
- How can sales people be controlled, lead, navigated and motivated?

For this particular project, the primary research is a very important point to understand the situation of the leadership structure of Meusburger. The purpose of the primary research is to understand processes and people who work in the sales force of Meusburger. The structure has to be figured out and the whole situation of working in this particular sales force has to be analysed.

2.2.1.1 Internal published documents and general knowledge

Through a qualitative approach, general knowledge of the company is investigated. Reports of the company (based on statistics and experiences of the sales agents), directives for the sales force and executives, instructions and general company knowledge have to be analysed. The different systems, which are already in use, are structured and listed in the project thesis. Therefore, the publication of the Master thesis project work has to be blocked for security reasons.

General knowledge of sales controlling and leading instruments of the author is also brought into the work as the author works in this field for several years and has the status of an expert too.

2.2.2 Expert interviews

2.2.2.1 Type of interview

In the qualitative research, the human subject is very important and meanings can only be understood by looking at a problem in detail (Spöhring, 1995, pp.150).

The only appropriate method to understand the hierarchy and system is to do expert interviews in the company Meusburger.

One on one interviews with several key players in the sales force have to be conducted. The key players in the sales force are more interesting because of their function, not because of their persons (Mayer, 2002, p.37). They are all experts within the Meusburger sales force and all of them are responsible for their own customer base.

The aim of the qualitative research is to develop theories from empirical researches - observed individual cases will be turned into general valid theories (Ibid, 2002, p.22). There are enormous possibilities to find out appropriate ways of working in the sales force and leading sales people through the expert interviews. After that, the experiences can be turned into general instructions and methods for the sales force.

Four interviews with the most experienced sales agents are held.

The aim is to find out how people in the sales force want to be lead and what is important for them, especially in this specific situation that they are working outside the office alone in their home countries with almost telephone contact to the Meusburger headquarter in Wolfurt. Through interviewing different longtime employees, a in depth view of the situation could be found out. This relates to an exploratory type of research: It has to be explained how or why things are as they are, it has to be found out more about the under researched topic (Spöhring, 1995, pp.151).

The interviews are done unstructured, because after Schnell et al. (2005, pp.322), unstructured interviews can show up a greater breadth of data than other interviewing systems. It shall appear to the interviewees as a casual conversation with the author about their experiences, meanings and behaviour.

2.2.2.2 Framing the interview

According to Denzin and Lincoln (2000, p.660) and Spöhring (1995, pp.151), unstructured interviews have a wide variety through an informal nature; they are depending of the setting and of the used techniques. Introducing the interview, first the “ice will be broken” through general small talk and different warm-up questions.

After that general part, more specific questions in reference to the topics sales management and leadership will be addressed to the interviewees:

1. Which factors are important for the motivation of a field sales agent?

- Aim of the question: What further possibilities does Meusburger have to motivate the sales people, what are they expecting?

2. What functional and disciplinal support does a field sales agent anticipate from his direct supervisor?

- Aim of the question: Analysis how a field sales agents can be supported and what background a sales manager should have. What is a sales agent expecting from his supervisor?

3. What functional support does a field sales agent expect from the sales controlling department?

- Aim of the question: What bureaucratic support can the sales controlling department give to the sales agents in case of reports, scoring and evaluation? What support is unimportant?

4. In which way would the field sales agents like to be lead / what is the appropriate way of leadership?

- Aim of the question: What is the appropriate way to be lead in a sales force (especially in the situation of working in a sales force in different countries)?

5. How can the sales controlling department assist a supervising sales manager in terms of leadership and guidance of the sales force?

6. What are the current problems in the sales force of Meusburger?

- Aim of the question: How can the sales controlling department support the sales force manager in case of leadership and reports of his subordinates?

6. What are the current problems in the sales force of Meusburger?

- Aim of the question: To find out some general problems in the sales force related to the leadership situation.

7. What could be an appropriate idea to build up a structure in the sales force of Meusburger?

- Aim of the question: Do the field sales agents have concrete ideas to develop a leadership structure?

One interview should take about one hour time. It is kept in a closed meeting room and is recorded digitally (if accepted through the interviewee). The process is an open conversation in a good, friendly atmosphere. All of the interviewed persons are known personally through the author.

2.2.2.3 Interpreting the interview

The results of the interviews are directly integrated into the project work; the interviews will be recorded and saved as digital files.

In the next step the main content, the important parts for the project are taken out and written down. After Denzin and Lincoln (2000, p.661), the data has to be “cleaned and streamlined and collapsed in rational, no contradictory accounts”.

2.2.2.4 Ethical considerations

In this type of research, the ethical handling and use of data is very important. Spöhring (1995, p.269) explains that the objects of inquiry (the interviewees) are human beings, so the interviewer must work very carefully to avoid harm to them. The interviewee has to know that the data is used for the project work and has to accept the use of data in advance through a written consent form (see appendix).

On the following three ethical concerns the author takes care of:

- Informed consent: Receiving acceptance through the interviewee before the research and the interview
- Right to privacy: Protecting the identity of the human being, the interviewee
- Protection from harm: Emotional, physical and any other kind of harm

These three concerns shouldn’t be dismissed in doing a survey (Denzin; Lincoln, 2000, p.662).

The information from the interviewee is encoded to protect the interviewee. Because there is no ethical critical content part of the survey and of the project work, there are no other points to be considered. Potential personal verbal attacks and assaults are not written down and used for the project work.

2.3 SECONDARY RESEARCH

In the situation analysis and the definition of the objectives and strategies for Meusburger, company knowledge is combined and completed with general knowledge out of literature, called secondary material (Theisen, 2002, p.94). The following two main topics are researched:

- Literature according to the topics management and leadership: General literature to these topics has to be investigated, different management and leadership styles are analysed and methods of management styles will take part and shown in a chapter of the work. Success factors of good leadership will be defined.
- Literature according to the subjects sales, sales controlling and sales management: Specific sales related literature is reviewed and overworked

The literature is checked and important parts are marked in the first step. After the first review of literature, a general overview, structure and directory of the Master thesis is done. In the next step, the literature to the single chapters is reviewed and the important content is collected in the single chapters. Then the different opinions and models are compared with the other collected approaches.

2.4 CONCLUSION - GAP ANALYSIS

After the first chapter, the situation analysis, an analysis of the weaknesses and threats as a part of a Strengths-Weaknesses-Opportunities-Threats analysis (SWOT) is done (Hungenberg, 2004, p.85).

In the next chapter, the objectives, the improvement of these positions are written down in combination with the defined success factors for leadership and sales management out from literature.

The way to reach the objectives will be explained in the chapter strategy.

Through the theoretical outcome of the secondary research and in combination with the primary research, a system to improve the sales force of Meusburger is developed. This system shall be a practical instrument, which works as a management cycle and is explained in detail in the project work. The detailed steps like actions, tactics and control are defined in an overview, but the implementation of the system will be done in an own company project.

The recommendations are given to the company Meusburger as a result of the Master thesis project work.

During the process of developing the management tool the top management of Meusburger will be consulted to ensure that the deliverables and findings are going conform algin the meaning of the management.

3 SITUATION ANALYSIS OF THE MEUSBURGER COMPANY

3.1 ABOUT MEUSBURGER

The Meusburger Georg GmbH & Co KG is one of the leading companies for the production of standard moulds made of steel for the die-mould injection industry in Europe. According to Richter (2001, p.14), it is a classical B2B company which is serving business customers in whole Europe. With 260 employees in Wolfurt (Austria) and a turnover of EUR 73 millions in 2007, Meusburger is one of the leading companies for standard moulds in Europe.

Meusburger was founded 1964 through Georg Meusburger and started as a one man business as a mould maker. In 1978 Georg Meusburger started to produce and sell standard moulds. This was the beginning of the big growth of the company.

illustration not visible in this excerpt

Fig. 1: Meusburger products (Meusburger, 2008)

Standard moulds are plates of steel and accessories, which are needed through the mould makers to build moulds for the die injection industry to produce plastic parts. Meusburger is overtaking steps of the production for his customers and is generating economies of scale & scope as a supplier of standard mould parts. Economies of scale are defined as reduction in cost per unit through increased production; economies of scope are seen as advantages through learning effects concerning similar product lines and technologies (Kotler 1999, p.634; Campus, 2003, p.1614). These generated economies of scale & scope are sold through Meusburger to its customers, because the customers are generating profit through the standardized production of Meusburger and can achieve a better price from Meusburger than if they need to obtain the equipment and capacities themselves.

3.2 SECTOR & ENVIRONMENT

The target market of Meusburger is Europe; the export rate in 2007 was 88 %. The biggest market is Germany with about 55 %, France and Switzerland with both about 8 % each and Italy with 5 %. 12 % of the turnover is exported mostly in the Eastern European countries and about 12 % are sold within Austria. Meusburger is a subcontractor for mould makers in whole Europe.

3.2.1 Arrangement of the industrial sector

After Backhaus (1999, p.65) and Uestuener et al. (in Harvard business Review on strategic sales management, 2007, p.108) it is essentially important in the sales of industrial goods, to find the right decision makers, in bigger companies the so called decision making unit (DMU).

The buyer’s decision of the Meusburger customer is always depending on the arrangement of the different companies who are working together with Meusburger (see detailed explanation in the appendix):

Direct customers (who are buying from Meusburger):

- Mould makers:

Mould makers are producing moulds for the industry, mostly small companies where the owner is the decision maker

- Injection moulding companies with own mould making department Are producing moulds for the own demand

Indirect customers (system partners):

- Injection moulding companies without own mould making department - prescribers

These are the end-users of the Meusburger products who are producing plastic parts with moulds. For bigger and multinational companies it is important to use the same mould quality in the whole world, the orders are mostly standardised if Meusburger is mentioned in the functional specification.

- Designers

Are constructing and designing moulds on order of the mould makers or injection companies. Designers also have influence on the buyer’s decision because they can use different standard moulds in the planning which have to be used afterwards through the mould makers.

Other groups of interest:

- Competitors

Direct and indirect competitors

- Schools, educational institutions and associations

In every single case and arrangement it is important for the sales agent of Meusburger to find out who the decision maker is. It is possible that single people of direct and indirect customers are making the buyers decision.

3.3 DEFINITION OF THE SALES PROCESS

In the sales process of industrial goods, especially product goods, the selling depends on the given preliminary work of the sales agent (Bänsch, 2006, p.104). The sales of industrial products are seen as extensive purchases because they are marked through the research for alternatives and benchmarks. In this case, the competency and excellence in consultation of the seller is very important (Nerdinger 2001, p.56).

After respondent 3 of the interviews taken in the sales force, the sales process of Meusburger is structured in the following way:

1. Preliminary work: At the beginning of the relationship, the seller has to get knowledge of the customer through other Meusburger customers or members of the sector and find out different general information about the company

2. First visit:

a. Presentation of the company Meusburger
b. Show some selected and new products
c. The catalogue with prices has to be presented and the seller has to analyse through discussions, in which price segment the customer is
d. Specific discount rates on different article groups will be bargained, depending on the potential of the customer and his needs, the seller can use the flexible discount system which is very complex and has a lot of possibilities for the sales force to use
e. In addition the CD Rom catalogue may be installed on the customers computer, which can be used as an effective ordering system

3. Follow-up work: The seller has to communicate the agreed discounts as well as the customer specific data to the headquarter through entering in the Customer Relationship Management software

4. At the next demand of standard moulds, the customer will hopefully request a list of material from Meusburger and receive an offer with the agreed conditions; in some cases the sales agent has the possibility to bargain the offer again if necessary.

According to respondent 2, one of the most important steps in the order process is that the seller doesn’t have the ability to bargain each offer on location with the customer. The customer and the competitors have to be estimated when the seller is visiting the customer and is bargaining the full year discounts, which are valid for the whole year (but can be negotiated during the year again if necessary). Only in some cases, the seller will have the ability to renegotiate a single offer (especially if bigger amounts are requested).

After respondent 1, the seller has to find and define the right decision makers in the company to negotiate - this is very important but also difficult.

It makes sense, to work after the Relationship Marketing approach: There is a high interaction between customer and supplier, the goods and services are having a high relevance and buying decisions are mostly made rational. The roots of the Relationship Marketing are in the industrial goods sector; because of the structures in the sector the thinking in customer relationships is very important.

The employees know the importance of customer relations; they are acting relationship oriented. But mostly the development of a relationship is unstructured: There is no segmentation after profitability, the process is not planned, controlled and managed. In addition, in the industrial sector the orientation after operating profit is more important than the customer orientation (Bruhn 2001, pp.254).

Respondent 4 says, that in this case it is very important for the agent, that she/he knows the exact guidelines i.e. discounts for single customers. In some cases it would be easier for the sales agent if visits are held through two persons - especially specific bigger customers should be visited through two persons to build a selling centre - the sales agent and the supervising manager of the agent to show the customer the importance of the visit.

Moreover, after respondent 2, there is sometimes support missing, because the sales management hasn’t enough time to visit customers with the single sales managers.

3.4 OVERVIEW OF THE MEUSBURGER SALES FORCE

illustration not visible in this excerpt

Fig. 2: Overview of the Meusburger sales force (Meusburger, 2008)

According to Behle et al. (2006, pp.45), it is useful to build defined sales areas for sales agents for which they are responsible. Additionally, strategic planning for the company is easier if the areas are defined exactly. This is the way how the sales areas of Meusburger are structured. Meusburger has 29 sales agents in total all over Europe (May 2008). In Germany, there are 12 people in the field, in Italy four, in France three, in Austria two and in Switzerland two. All other countries like GB, Hungary, Czech Republic / Slovakia, Slovenia / Croatia, Poland and Romania are attended through one single person in the field. Every external sales agent is supported through one or more internal sales persons, who are always remaining the same. The internal sales person is assisting the sales agent in handling customer requests and orders. The field sales agent is visiting the customers, presenting new products and serving the customers in all kinds of problems directly on location but doesn’t have to work operational (entering orders etc). Belz (2000, p.209) confirms this general trend of the development of the internal sales people to an assistance of the sales agent who are growing to a “tandem” in the sales force, a teambuilding process is coming up.

The aim of this structure is to build up teams for each area so that the customer always has the same persons in charge for him at the headquarter and teamwork is evolved.

After respondent 2, it is necessary that the internal sales person gets better knowledge of customers and customers get to know the internal sales person personally. He would prefer to work out strategies to win single key account customers together with a supervisor and his internal sales person more detailed. But in general the teambuilding idea of internal and field sales person is very good and the support through the internal sales team is professional. Respondent 3 agrees with this meaning.

Concerning the size of the sales areas, all 4 respondents have the same meaning: after the already done reduction of the sales areas in the years 2006 and 2007 especially in the main market Germany, the size of the areas is ok now to give an optimised support to the customers. The average size is about 500 customers or potential customers including designers and prescribers per sales agent, after respondent 1 and 3. As key criteria for the identification of the size of sales areas, Meusburger used the quantity of customers and the number of necessary visits per customers per year. This procedure is confirmed through Behle et al. (2006, pp.45). According to Belz (1999, pp.90), the customer value, e.g. segmentation should be considered in the planning of visits.

3.4.1 Hierarchy of the sales force

The sales division is lead through Guntram Meusburger, the Managing director and the head of sales. It includes four different departments: the internal sales, the external (field) sales force, the marketing and the product department. The field sales force is lead through one sales manager who is about 55 years old and has a 30 years experience at Meusburger:

illustration not visible in this excerpt

Fig. 3: Meusburger sales force hierarchy (Meusburger, 2008)

From the point of view of the researcher, the existing problem of Meusburger came up through the growth of the company in the last years: entering more and more European markets, the field sales force of Meusburger grew up to 29 persons at the moment (May 2008). In the year 2002 it had about 12 persons. The most important weakness of Meusburger is the missing hierarchy and managing position in the field sales force.

[...]

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Details

Title
Strategic development of a Sales force leadership model. The Sales force of the Meusburger Company
College
Leeds Metropolitan University  (Economics)
Course
MA of International Business Administration
Grade
1,0
Author
Year
2008
Pages
74
Catalog Number
V385870
ISBN (eBook)
9783668611818
ISBN (Book)
9783668611825
File size
1465 KB
Language
English
Tags
Service, Marketing, sales, leadership, sales force, außendienst, vertrieb, vertriebsleitung, verkauf, verkaufsleitung
Quote paper
Mag. (FH) Markus Scheffknecht (Author), 2008, Strategic development of a Sales force leadership model. The Sales force of the Meusburger Company, Munich, GRIN Verlag, https://www.grin.com/document/385870

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