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mgmt memo
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.
Services includes:
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
president.