Marketing Reading

Doug J. Chung; Das  Narayandas

Other Teaching and Training Material | 2014

Marketing Reading: Sales Force Design and Management

Abstract

This Core Curriculum Reading introduces students to (1) the importance of sales force design in implementing organizational strategy, and (2) the role of sales force management in linking structures and processes to behaviors. The material combines theoretical perspectives with real-world examples, drawn from the business-to-business (B2B), business-to-consumer (B2C) and nonprofit sectors, to illustrate the range of challenges and opportunities in this field.
The Reading includes an interactive illustration enabling students to test varying levels and combinations of fixed and variable compensation components. Three videos address the topics of (1) aligning strategy and sales, (2) engaging employees, and (3) using customer-feedback metrics in evaluation systems.

Keywords: Sales budget; Sales compensation; Sales cycle; sales force management; Sales forces; sales management; Sales operations; Sales organization; Sales planning; Sales strategy;

Language: English

Format: Print

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Citation:

Chung, Doug J., and Das Narayandas. "Marketing Reading: Sales Force Design and Management." Core Curriculum Readings Series. Boston: Harvard Business Publishing 8213, 2014.

The case focuses on issues involved in managing the direct multilevel marketing sales consultants who sell R+F skin care products. The company is trying to better manage the inconsistent and highly variable recruitment behavior of the sales force i.e., the degree to which existing consultants recruit new consultants. The company utilizes a range of periodic incentives for recruitment, but hopes to build a system of salesforce compensation and management that relies more on intrinsic rewards and less on these periodic incentive programs. The case forces students to address principles of compensation system design, as well as more fundamental issues around what they believe motivates this "volunteer" (i.e., non-employee) sales force.

Article | Marketing Science | July–August 2020

Price Bargaining and Competition in Online Platforms: An Empirical Analysis of the Daily Deal Market

Lingling Zhang and Doug J. Chung

The prevalence of online platforms opens new doors to traditional businesses for customer reach and revenue growth. This research investigates platform choice in a setting where prices are determined by negotiations between platforms and businesses. We compile a unique and comprehensive dataset from the U.S. daily deal market, where merchants offer deals to generate revenues and attract new customers. We specify and estimate a two-stage supply-side model in which platforms and merchants bargain on the wholesale price of deals. Based on Nash bargaining solutions, our model generates insights into how bargaining and competition jointly determine the price and firm profits. Our results show that there is systematic variation in bargaining power between platforms and merchants with different characteristics. By working with a bigger platform, merchants enjoy a larger customer base, but they are subject to lower margins due to less bargaining power during negotiations. Our counterfactual results quantify the value of platforms for merchants and show that merchants with lower bargaining power benefit more by working with a smaller platform. Regarding the impact of price negotiations on platform competition, we estimate that roughly 11% of the deals on a smaller platform are attributable to the platform’s lower level of revenue sharing.

Keywords: business-to-business marketing; platform competition; Two-Sided Markets; price bargaining; daily deals; structural model; Two-Sided Platforms; Competition; Price; Negotiation;

Citation:

Zhang, Lingling, and Doug J. Chung. "Price Bargaining and Competition in Online Platforms: An Empirical Analysis of the Daily Deal Market." Marketing Science 39, no. 4 (July–August 2020): 687–706. View Details

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This brief case describes the rise of so-called digital natives (also called born-in-digital) in the 2000s and 2010s that successfully grew without a sales force. The case highlights the emergence of business-to-business Internet and cloud-based companies and their decisions regarding sales strategy based on different customer bases. The case discusses the firms Atlassian, Basecamp, and Slack.

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Marketing Reading: Sales Force Design and Management

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