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Articles about DEC
Volume 4, Number 7 November 1985
U.S. Sales Organization Launches Three Major Sales Strategies For FY86
Digital Announces Opening Of Manufacturing Plant In Mexico
New Marketing Organization Created
Product/Applications Marketing by Peter Smith, vice president
U.S. Industry Marketing by Bob Hughes, vice president, and Jerry Witmore, vice president
Channels Marketing by Jack MacKeen, vice president
Management Changes In U.S. Sales, Field Service And GIA
The U.S. Sales organization is bringing new focus to some of the ways Digital approaches its customers. In an effort to improve customer satisfaction and operating efficiencies, as well as broaden the base of business, three new sales strategies were introduced in the first quarter:
o The Selling Services Strategy, which will create a fully integrated selling approach for Sales, Software Services, Educational Services and Field Service;
o The Volume District Strategy, which provides a specialized sales and operations focus on the end-user and volume businesses; and
o The Target Sales Force, an organization focused on new business development.
"All three efforts are expected to make a positive impact on customer satisfaction and make our operations more efficient and cost-effective," states Chick Shue, vice president. "We think these strategies will encourage teamwork and better integrate the Field organization."
Creating an integrated sales force
"The Selling Services Strategy is designed to help us present a more unified front to our customers who buy hardware and services. By FY87, it will involve a totally integrated sales force focused on selling solutions for customer-specific needs. This change in the way we sell services will leverage the strength of the entire services organization and encourage a greater partnership between Field Service, Software and Educational Services and Sales," explains Chick. A Sales Selling Services project team has been created, with representatives from each of the four headquarters field organizations, to lead the U.S. in this undertaking.
FY86 will be a transition year for the Selling Services organization. Each Sales District will have a Selling Services Unit that will provide a focal point for direct sales of custom services businesses and a point of leverage to integrate all our services offerings into account, territory and project plans. "Integrating services into our solutions-oriented sales approach will provide us with a clear competitive advantage," states Chick.
Affirming our commitment to the volume market
"The new Volume District Strategy will provide additional focus on the needs of our volume accounts (resellers such as OEMs and other third-party dealers). Designed to recruit new quality OEMs, attract OEMs from our competitors and give better service to our existing OEMs, this strategy recognizes the differences in channel selling and will enable us to gain greater effectiveness in our overall sales organization. All volume accounts will become part of the new Volume Districts in each region except for selected government prime contractors which will remain part of the end-user districts.
"We will identify volume salespeople and create a Volume District in each region," continues Chick. "Our Volume Sales reps will be measured on orders shipped rather than certified orders. This will help assure greater predictability of a solid backlog and a firm delivery schedule." The Volume District approach will provide a consistent way of doing business with volume accounts, improve customer satisfaction, and allow Digital to gain share in the high-quality segment of the volume market. "From the perspective of the customer," Chick notes, "it revalidates our commitment to the volume market. From an internal perspective, it enables us to better train and communicate with this segment of the sales force."
Targeting new applications and markets
The Target Sales Force, headed by Wayne Furman, will be a special unit of 100-150 sales and pre-sale support professionals selling to specific target markets on the Eastern Seaboard. Says Chick, "These targets are over and above current FY86 U.S. sales forecasts, and we expect incremental business from them." Target opportunities include specific accounts, selected applications and untapped geographic markets. Among the applications targeted, for example, are RPG on MicroVAX II, a MicroVAX PC server, and bounded MicroVAX II ALL-IN-1. The Target Sales Force will also penetrate business in cities where the current base of business is insufficient for remote sales representatives and too distant for existing sales offices to cover. By November 1, the first 100 sales people were in place and ready to go.
Says Wayne Furman, "We expect the Target Sales Force to enable Digital people who want new careers in sales to enter the business in a way that is strategically important to Digital. In FY86, we expect an incremental contribution of about $100 million."
Oriented for results
"Taken together, the U.S. Sales organization is confident that these strategies will help us more effectively deliver Digital’s key product and service strengths to the marketplace," Chick concludes. "They will also increase customer satisfaction, and help us become a more effective selling organization. Integrating the selling of services into our sales organization, segmenting the end-user and volume channels and targeting new business are expected to make major contributions to our success in FY86."
Digital has announced plans to open a 50,000-square-foot manufacturing plant in Chihuahua, Mexico. MicroVAX II systems, as well as cables and harness assemblies, will be assembled and tested in this plant, which is scheduled to begin shipping products in early 1986.
This manufacturing operation gives Digital access to the Mexican market to sell computer systems, supplies and software. Digital's production facility in Mexico will meet the Mexican government's legal requirements for investment by a foreign-owned minicomputer company.
These requirements include establishing a plant that produces computer systems for both the Mexican and export markets, developing local vendors for production materials, investing in research and development, and generating exports to achieve balance-of-trade commitments.
Digital recently announced some changes to the company's marketing structure, which are expected to strengthen the company’s position in the marketplace and to more effectively integrate marketing in the company. These organizational refinements are also expected to enhance Digital's ability to develop and better market applications through specific channels to specific customer groups.
Traditional lines of marketing support will remain intact, as the organization continues to evolve in Product, Industry and Channels directions. The organizational structure within each of the major groups is intended to assure that continuity.
Peter Smith, vice president, is now responsible for managing the Product/Ap- plications Marketing organization. He reports to Jack Smith, vice president. Peter's direct reports include:
Henry Ancona, Office Applications (OIS)
John Mucci, Science Applications (LDP)
Bill Steul, Engineering Applications (ESG)
Jim Dale, Manufacturing Applications (MAG)
Dave Copeland, CIM Development and Marketing
Gary Eichhorn, Product Marketing Programs
Industry Marketing has expanded, with Bob Hughes, vice president, in charge of the Services Industries Marketing Group and Jerry Witmore, vice president, responsible for the Basic Industries Marketing Group.
Jerry's direct reports include:
Joel Schwartz, vice president, Education/Medical/State & Local Government
Jerry Paxton, Aerospace/Electronics
Bob is forming organizations to serve the following industries: Financial Services, Telecommunications/Utilities, Media and General Services.
A Channels Marketing organization, headed by Jack MacKeen, vice president, has also been created. Jack's direct reports include:
Jim Willis, Commercial Marketing
Dick Heaton, Technical Marketing
John O'Keefe, Area Marketing
Eli Lipcon, Marketing Partners
Joe Arayas, Marketing Services
Dan Riordan, Systems Marketing
Bob, Jerry and Jack all report to Jack Shields, vice president.
In addition, the Government Systems Group continues to report to Harvey Weiss, vice president, in his new capacity as manager of U.S. Sales Operations. Large Systems (LSG) and MIS Marketing continues to report to Rose Ann Giordano, vice president, who now reports to Bob Glorioso, vice president. And Small Business Marketing reports to Jay Atlas, who reports to Chick Shue, vice president, who now heads U.S. Sales.
The purpose of Product/Applications Marketing is to put together complete products that consist of our corporate products with value-added applications, packaged and supported in ways that the Field can sell them.
Our goal is to provide a set of complete and generic products that can be used in a wide variety of industries — such as office products that are applicable in automotive plants as well as in banks. Industry Marketing may then focus these products to meet the particular needs of specific industries.
Other groups within Digital — including Software Services and Engineering, as well as Industry and Channels Marketing — will work closely together as a team to achieve our common goal of total systems focused on customer needs. And, in so doing, they will all be involved with applications. But Product/Application Marketing will act as the driver of the corporation's applications strategy.
Our group will focus on applications for: Engineering, Manufacturing, LDP/Science, and Office. We will determine which applications have broadbased appeal to customers and build or acquire them. In the past, this effort was secondary to the development of the base products. Engineering would design and test a product, then turn it over to the marketing groups that would add applications and pull all the pieces together for the announcement.
To be successful in the future, we will have to provide total solutions to customer problems. And to create those total systems, we have to take the applications into account when designing the base products. It's not enough to say that a new VAX processor is ready from an engineering point of view and then later market applications on top of that. We've got to imbed the applications in the development and the announcement philosophy of the product. You have to test the products for the ways customers will actually use them and develop the packaging, the pricing and the positioning of the products with customer needs in mind.
So we want to have an overlap of responsibility between the people who plan the applications and the people who plan the base product. A main function of Product/Applications Marketing will be to determine what customers need and how they actually use our products and to communicate those requirements to Engineering to make sure we provide complete customer solutions.
The focus of all three marketing organizations — Industry, Product/Applications and Channels Marketing -— is to bring customers into our entire corporate strategy, to strive to meet customer requirements whether through developing applications, acquiring them, using partners or using OEMs.
We want to learn to speak the language of our customers by industry, package our products by industry, promote them that way, train our Sales people and other marketing groups that way, organize the Field that way and influence Engineering that way.
Our goals are to increase sales by industry, expand our existing base across industries, expand our business base in existing accounts, maximize channel activity by industry and develop an industry applications strategy. This effort will complement Field sales activities, which are already organized by account.
The industries we plan to focus on in FY86 are: aerospace, automotive, banking, telecommunications, newspapers, pharmaceuticals, chemicals, electronics (including test equipment), education, medical, legal and utilities. Organizationally, we group these as Services and Basic Industries.
Financial Services (banks, real estate, insurance, brokerage);
Telecommunications/Utilities (also including construction and shared tenant services);
Media (newspapers, printing, broadcasting);
General Services (service bureaus, legal, airlines, rental cars, larger retail and wholesale distributors, hotels and entertainment, and CPAs)
Basic Industries includes:
Discrete Manufacturing (automotive, trucking,
shipping, steel, glass)
Process Industry (oil/chemical, pharmaceutical/drugs, food/beverage)
Electronics (including scientific and test equipment)
"SLEM" (state and local governments, education and medical)
The object is to learn enough about our customers so we can spread what we do well for one customer to other customers in the same industry and thereby increase market share and profitability. We’re talking about selling today's products with today’s channels — just packaging and remarketing what we do today.
With industry marketing, we can better use our successes at one major company to generate similar business in the rest of that industry. It's a rifle, rather than a shotgun approach.
If you can capture a position within the number "one" company in an industry, you can leverage sales to the other companies. Working in this manner gives you the kind of reference sell that is critically important in an industry. For instance, if we are a significant player in helping General Motors accomplish what they think they have to do, then we should find it relatively easy to get inside Chrysler. That's an important concept because it means we can start up an industry marketing focus with a small number of people and get tremendous leverage by working this model.
Packaging our products and applications by industry need is critical. For example, to sell to banking, we must package our offerings in words that the banking industry understands. We can take our electronic mail strategy, tweak it about 5% and make it an electronic funds transfer package. Similarly, for banking, we wouldn't just sell ALL-IN-1 or word processing. Rather, we would sell a complete application, such as a sales and marketing system under ALL-IN-1 refocused and called the "loan officer’s workstation."
This effort is evolutionary. There's no crisp answer. We want to focus as much of the sales force around classes of customers as we can, with the objective of training them about those kinds of customers, making them very knowledgeable about particular industries.
In this area, Sales, with its account focus, is actually about two years ahead of Marketing.
We don't envision Industry Marketing having lots of people. But it needs real experts. We have to become recognized leaders in specific industries, just as we have become recognized leaders in functions such as Engineering and Departmental Computing. Senior executives should come to think of us as partners in solving their industry problems.
The Channels Marketing group brings together all of Digital's indirect activities related to taking products into the marketplace. Our objective is to assure that those applications solutions that Digital chooses to provide through third parties are made available to customers in the most effective way possible. If we need to provide a solution to a targeted industry, but we don’t directly provide the needed application, we will find and work with the OEMs and software houses that build those solutions.
There are three areas on which we will focus as a group. First, we want to integrate our OEMs into Digital's marketing strategy. Second, we will develop strategies to work more collaboratively with OEMs that serve applications we do not choose to serve directly. Third, we will create a strategy for dealing with authorized dealers and distributors to help us distribute our low-end products.
Our overall goal is satisfied end user. This is a significant change from our previous approach, which was to satisfy the OEM. One aspect of satisfying end users is to be certain that our OEMs understand our corporate strategic directions. Another is to be consistent in our treatment of OEMs and our arrangements with them, no matter where they operate around the world.
From a Field perspective, Channels Marketing is committed to support Digital salespeople who focus on volume sales; to communicate with them, to drive training and product issues and basically to provide marketing direction for the indirect side of the house. Our new structure, plus the establishment of the Volume Sales Districts in the U.S. (see the article by Chick Shue on page 8) will enable us to do this quite effectively.
The Channels Marketing organization incorporates six entities — Area Marketing, Commercial Marketing, Technical Marketing, Marketing Partners, Systems Marketing, and Marketing Services. Area Marketing focuses our work with each individual Volume Sales District in the U.S. Commercial Marketing puts emphasis on commercial reseller activities in much the same way that COEM and the Authorized Dealer Program have operated for some time. Technical Marketing is the classic focus on Technical OEMs, microcomputers, authorized distributors and other third-party activities in the technical arena. Both Technical and Commercial Marketing recruit new OEMs and put new programs together to deal with the requirements of their particular pieces of third-party sales.
Marketing Partners focuses on those OEMs that complement Digital's strategies. Systems Marketing pulls together all of our product-related activities, including technical support, liaisons with Engineering, 12+ forecasting, etc. Marketing Services combines, under one manager, marketing communications, policy development, the planning process, and marketing research.
There are two types of channel partners — complementary and supplementary.
In the first case, Digital already has a presence in the marketplace but can benefit from cooperating with other vendors, often software houses, which have products that complement ours. For example, if we look at our Systems Cooperative Marketing Program (SCMP) for the mechanical CAD space, we see five or six mechanical CAD OEMs that have met the requirements to be marketing partners. We provide the structure and framework with our products, and the cooperative partners provide the solution-oriented tools. Sales credit is shared to encourage our sales force to work cooperatively with these specific OEMs. Also, we can tell the end-user that the entire OEM-provided system reinforces Digital's architecture, and that it all runs together and can be layered with future software applications. This type of cooperative effort makes some of our OEMs an integral part of Digital's industry/appli- cations strategy.
With supplementary partners, we may have no direct presence in a given market and want to use our OEMs to reach that set of customers. These activities are in addition to our direct and complementary thrusts.
It is very important for our OEMs to know that with the renewed emphasis on "finishing products" and the creation of an Applications Marketing group, Digital still has a strong commitment to third-party resellers. End users are looking for a range of solutions, and we simply intend to determine which solutions we want to directly provide for our customers and which ones our OEMs are better able to provide. Definitions around these issues and the implementation of third-party relationships are the responsibility of Channels Marketing.
Chick Shue, vice president, is now responsible for U.S. Sales. In this role, he will manage all U.S. Sales Regions as well as Digital's Small Business Direct activities.
Harvey Weiss, vice president, will serve as manager of U.S. Sales Operations, including Area Manufacturing Business Centers, Customer Administrative Services, and the Peripherals and Supplies Group. He will also maintain his current management responsibilities for the Government Systems Group.
Dave Grainger, vice president, will be responsible for Field Service, managing the activity of this worldwide business.
Dick Poulsen, vice president, will serve as manager of GIA, directing the Field businesses in that area.
All four report to Jack Shields, vice