Sales Management

Sales Management

Welcome to the world of

SALES

Objectives of Sales Dept.

• To achieve Sales Targets

• To achieve Market share targets

• To manage dealer network

• To organize sales training• To organize sales training

• To handle customer complaints

• To manage Sales promotion campaigns

• To effectively cover market

Sales Job Classification

• Delivery Salesman

• Order Taker

• Sales officer

• Sales Executive• Sales Executive

• Sales Supervisor

• Sales Engineer

• Sales Support staff

Various Sales Classification

• Deliverer: Only delivers goods

• Order Taker: Only takes customer orders

• Detailer: Details the product

• Technician: Engineering sales person• Technician: Engineering sales person

• Demand Creator: Creative sale of tangible and intangible products.

Market Scenario

• It’s a battle of Products, Categories, Brands.

• Every product category is getting divided • Every product category is getting divided further into new categories.

Category. Cell Phones..

• Its NOKIA v/s MOTOROLA v/s SAMSUNG v/s SONY v/s HAIER v/s many others.

• Market crowded with too many products.• Market crowded with too many products.

Category Pizza…

• It’s Pizza Hut v/s Domino’s v/s Smokin Joe’s v/s Papa John’s

• Market crowded with too many products.

Category Motorbikes…

• Hero Honda v/s Bajaj v/s TVS v/s Yamaha v/s Honda v/s Suzuki

• Market crowded with too many products.

Category Consumer Durables..

• LG v/s Samsung v/s Sharp v/s Sony v/s Videocon v/s Onida v/s Godrej v/s Hitachi v/s Philips v/s Whirlpool and many more..

• Market is overcrowded..

Category Soft Drinks…..

• Coca-Cola v/s Pepsi v/s Thumps up v/s Mountain Dew v/s 7-Up v/s Limca v/s Mirinda v/s Sprite v/s Gold Spot v/s Dukes and many more….and many more….

• What will the poor customer do?

Category 4 Wheelers….

• Maruti Suzuki v/s Hyundai v/s Tata Motors v/s General Motors v/s Ford v/s Skoda v/s Mahindra v/s Mercedes Benz v/s Volkswagen v/s Nissan v/s Fiat…..Volkswagen v/s Nissan v/s Fiat…..

• Too much really….

What is the outcome???

• Too many Co’s

• Too many categories

• Too many segments

• Too many brands• Too many brands

• Too much of choice

• Too much of confusion…Resulting into ‘THE ASSAULT ON THE MIND’

THEREFORE……..

• Managing Sales has become a complicated function.

• Sales has become too challenging and an • Sales has become too challenging and an uphill task.

Sales Management means,

• Managing Sales Force

• Offering Sales Training

• Managing Channel partners

• Managing Direct sales• Managing Direct sales

• Managing Sales Promotion

• Managing Sales Territories

• Managing Sales Targets

Sales Planning

• Planning is deciding on…

• WHAT are we going to do?

• WHEN are we going to do?

• WHERE are we going to do?• WHERE are we going to do?

• WHO is going to do?

• WHY will it be done? AND

• HOW will it be done?

Observation

• Successful companies do a lot

of planning and outperform

their rivals and also their own their rivals and also their own

past performance.

Strategic Planning

• These are the decisions about company’s lond term objectives and strategies.

• Sales planning occurs at various levels in the company.the company.

• Multi-product, Multi-business co’s plan at 03 levels..1)Corporate plan 2) SBU plan and 3) Product functional plan.

LEVELS OF PLANNING

• Corporate Planning : Long term planning

• Div./SBU Planning : Long term planning

• Functional Planning : Operational, short term.

Strategic Planning Process.

• Step no 1:

• DEFINING BUSINESS • DEFINING BUSINESS MISSION

Strategic Planning Step no. 2

• ANALYSIS OF EXTERNAL BUSINESS ENVIRONMENT,

1)Current market size.

2)Growth patterns2)Growth patterns

3)Product trends

4) Segment trends

5)Customer needs analysis, buying behavior trends.

Step 2 contd…

6)Current product and marketing mix.

7)Competitors analysis: Their strategy, 7)Competitors analysis: Their strategy, current performance, SWOT analysis and their future plans.

Step 2 contd..

• EXTERNAL ENVIRONMENT,

1) Economic environment,

2) Demographic environment,

3) Political environment,3) Political environment,

4) Technological environment

5) Cultural environment

Internal Environment

1) Employees,

2) Product Mix

3) Channel Partners

4) Suppliers4) Suppliers

5) Vendors

Designing, Selecting Strategies

• CLEAR-CUT STATEMENT OF OBJECTIVES

Description of Strategies,

• Strategies with respect to,

• Target Market

• Marketing Mix• Marketing Mix

• Positioning

• Market research

• Network management

• CRM and MIS

ACTION PLAN

• Identification of weak markets

• Identification of strong markets

• Identification of focus markets

• Identification of focus segments• Identification of focus segments

• Identification of strong dealers

• Identification of strong dealers

• Market coverage, Sales promotion and budgets

Implementation and Control

• Weekly sales monitor.

• Product and segment wise monitor.

• Daily collection monitor

• Monitoring of Target v/s Actual • Monitoring of Target v/s Actual performance.

• Corrective Action

• Controlling expenditure.

Sales Forecasting

• Why it is needed?

• To plan and achieve and forecasted sales EFFECTIVE, without firefighting….EFFECTIVE, without firefighting….

• On the basis of Sales forecast other dept,s plan their activities. e.g. Production plan, finance planning, Human resource planning..

Types of Sales Forecast

1) Product related,

• National sales

• Industry sales• Industry sales

• Company sales

• Product line sales

• Area wise sales

Forecast contd.

• Time specific,

• Long Term sales,

• Medium term sales

• Short term sales

Forecast contd..

• Area specific,

1. Global sales

2. National sales( country specific)2. National sales( country specific)

3. Regional sales( north/south)

4. Territory sales( district level)

Terms used in Forecasting

• Market Potential,

It is the best possible estimated sales of a It is the best possible estimated sales of a given product in a given market for a specific time.

Market forecast.

• It is the expected industry sales of a given product at one specific level of industry marketing expenditure, in a given market, for a specific period of time. It is also for a specific period of time. It is also called as ‘Market size’.

Forecast contd..

• Company Sales Potential..

• Sales potential is defined as maximum share of market potential that is expected share of market potential that is expected to be achieved by a company.

Forecast contd..

• Company sales forecast,

• It is the estimated company sales volumes in units or service under a proposed in units or service under a proposed marketing plan, in a given market for a specific period of time.

Forecast contd..

• Sales budget,

It is the estimate of expected sales volume in units or revenues from company’s in units or revenues from company’s products and services and the selling expenses.

Sales forecasting methods

• Top-down/break-down approach.

In this method the Sales head breaks down In this method the Sales head breaks down the company sales forecast into region, district, territory, sales officer.

Bottom-up/Build-up approach

• This starts with the company’s area office to estimate the sales in their respective territories.

• Each Area manager adds the forecast received from the sales team, modifies the same and sends it to the Regional manager.

Bottom-up approach contd..

• Each Regional manager totals up the forecast, modifies the same and sends the regional estimate to the marketing head.

• The Sales/Mktg. head presents the • The Sales/Mktg. head presents the proposal to the CEO for further discussions and modifications.

Sales force Composite Method

• In this method salespeople are involved to estimate their future sales. This is the example of ‘Bottom-up’ approach.

• Sales force makes estimates about their • Sales force makes estimates about their sales after talking to the ‘Channel partners’.

Advantages of Composite method

• Salespeople have better insight of the market and competitors.

• Detailed sales estimate broken down into product, dealer and territory is possible. product, dealer and territory is possible.

• Forecast done by salespeople can be reliable to a large extent.

Sales forecasting…

• Important Review areas..

1) Industry details, Category- wise.

2)Target v/s Actual.2)Target v/s Actual.

3)% growth over previous year.

4) Variance analysis of Major towns and contributing reasons.

Imp. Review Areas contd.

1) Industry movement with segment %

2) Area wise ,Officer wise Tgt v/s Act and variance analysis.

3) Sales promotional Activity review, Town 3) Sales promotional Activity review, Town wise.

Key Result Areas-Review

• Key Result Areas could be,

1) CSI( Sales process/service process)

2) Dealer Network Expansion.2) Dealer Network Expansion.

3) Sales Training programs.

4) Special Strategic plans( Corporate level)

5) Business Results.

Based on Review,

• Planning or forecasting is made.

Plan includes,

1) Segment-wise ,Town-wise, Officer-wise, 1) Segment-wise ,Town-wise, Officer-wise, Dealer-wise projections. i.e. Targets. Volumes and Market share.

2) Growth over previous year.

Key Result Areas-Plan

• CSI( Sales/service process satisfaction)

• Dealer Network Expansion.

• Sales Training programs.

• Promotional budget requirements.( Town-• Promotional budget requirements.( Town-wise,activity-wise)

Performance Measurement.

• Why it is needed?

1)To identify salesperson’s weak areas and improve.

2)To decide increment in pay based on 2)To decide increment in pay based on performance.

3)To identify future Managers. (promotions)

4)To identify training needs.

5)To identify weak salespeople.

Measures of Performance.

1) Target v/s Achieved performance.

2) Growth achieved over last FY.

3) Sales revenue generated.

4) Market Coverage4) Market Coverage

5) Channel coverage and management.

6) MIS( Reports)

Qualitative Measurement.

• Selling Skills,

1)Developing rapport.

2)Presentation skills.

3)Use of Sales tools.3)Use of Sales tools.

4)Ability to overcome objections.

5)Ability to implement company plans.

6) Ability to close sales.

Qualitative Perf. contd..

• Customer Relationships,

1) Salespersons acceptability.

2) Efficient customer service.

3) Sales/Service advise.3) Sales/Service advise.

4) Keeping customer records updated.

5) Keeping customer information updated.

‘Sales Goals or Target settings’

• Sales targets are sales goals set by a company for its sales force for a specific time period.

• Sales targets can be set on volumes, • Sales targets can be set on volumes, profits, market share ,customer satisfaction or combination of all.

Why Sales targets?

• Performance standards.

• Controlling performance.

• Motivating sales people.

• Identification of strengths and weaknesses of sales team.

Considerations for Setting targets.

• Territory potential.

• Past sales experience/performance.

• Company’s plans for that market.

• Salespeople’s estimates.

Considerations…

• Set realistic targets.

• Understand problems.

• Ensure sales team understands targets.

• Involvement of sales team in target • Involvement of sales team in target setting.

• Continuous feedback.

• Flexibility.

Sales Organization.

• What is it and why it is needed?

1) Defines job relationships among people.

2) Defines reporting pattern.

3) Makes people perform with clarity, efficiency and effectiveness.

Basic concepts in Sales orgn.

• Degree of Centralization,

It means that in a centralized structure authority and responsibility is with higher authority and responsibility is with higher management levels.

Basic concepts contd.

• Degree of specialization.

It means that in today’s competitive scenario a general sales approach may not be effective.effective.

Therefore, salespeople are asked to handle special products, lines, areas, segments, customers etc.

Basic concepts contd.

• Market orientation,

It means that when markets are complex and varied in nature co’s must respond by designing a structure as per client’s need designing a structure as per client’s need and requirement.

Basic concepts contd..

• Effective co-ordination.

It means that Sales and marketing must have co-ordination between themselves have co-ordination between themselves for achieving ultimate organizational objectives.

Basic concepts contd..

• Span of control,

• It means that how many sales people are controlled by a sales manager and how controlled by a sales manager and how much should he be controlling?

Line Sales Organization

VP (SALES)

Zonal Manager Zonal Manager Zonal Manager Zonal Manager

Area Manager Area Manager Area Manager Area Manager

Sales Officer Sales Officer Sales Officer Sales Officer

Line Sales Organization

• It is simplest structure.

• Line organizations have clear authority and responsibility.

• Decision making is quick.• Decision making is quick.

• Too much depends on the Sales head.

• Subordinates may lack knowledge and skills of specialized areas.

Line and Staff organization

VP (Sales)

Manager

Sales Training

Manager

Logistics

Manager Manager

General Manager (Sls)

Manager

Advt.and Publicity

Manager

Mkt .Research

Zonal Managers

Area Managers

Line and Staff Organization

• Provides experts in areas like mkt. research, sales training, logistics etc.

• Better decisions can be taken in this structure.structure.

• Salespeople can focus on their work and targets.

• Better co-ordination and planning can be done.

Horizontal Sales OrganizationRes. And Design

•Product design.

•Service design

•Customer research

Operations Team

•Production

•Quality assurance

•Systems engineering

Customer Support Team

•Service

•Training

•Information

Customer Satisfaction Team

•Sales and Mktg.

•Logistics.

•Channel management

Horizontal Sales Organization

• This structure is cross functional in nature.

• Cross functional teams are formed.

• This structure reduces supervising costs and efforts.and efforts.

• It also improves efficiency and customer response.

• Co’s which are customer focused adopt this structure.

Functional Sales organization.

V.P. (Sales)

Mktg. Services

ManagerGM (Sales)

Market research

ManagerManager Manager

ZSM/ASM

Sales Officer.

Functional Sales Organization

• In this type of organization staff manager has a line authority of his function over sales people.

• Salespeople can receive instructions from staff managers.

Specializations within structures.

• Geographical structure.

• Product structure.

• Market oriented structure.

• Functional Structure.• Functional Structure.

• Combination structure.

Geographical Structure.

V.P.(Sales)

Manager

Market ResearchG.M.(Sales)

Regional Manager

North

Area Managers

State Heads.

Sales officers

Territory Heads.

Regional Manager

South

Regional Manager

West

Regional Manager

East

Geographic Structure

• This structure helps in better market coverage.

• Better sales force control is possible.

• Sales people can be held accountable as • Sales people can be held accountable as they are responsible for a specific territory.

• Quick response and customer service can be possible as the salespeople are in the field/market.

Product Specialized Structure

Vice President

(Sales)

General Manager

(Gen.Sets)

General Manager

(Water pumps)

General Manager

(Dairy Equipment)

Regional Manager

( Gen. Sets)

Regional Manager

(Water pumps)

Regional Manager

(Dairy Equipment)

Product Spl.

• This structure offers focused attention on each product group/division.

• Overall growth can be possible in this structure.structure.

• Product heads can design a better marketing strategy and can react to market needs quickly.

Market specialized structure

Vice President

(Sales)

General Manager

(Dealer Sales)

General Manager

(Inst./Govt.Sales)

General Manager

(Rural sales)

Regional Manager

( Dealer sales)

Regional Manager

(Inst./Govt.Sales)

Regional Manager

(Rural Sales)

Market specialized structure

• This structure provides specific market and customer needs.

• Customer satisfaction can be achieved.

• Selling costs can be on the higher side in this structure.

• May create overlap and confusion.

Sales Force staffing

• Steps involved in Sales force staffing are as follows,

1) Planning.

2) Recruiting.2) Recruiting.

3) Selecting.

4) Hiring.

5) Socialization

6) Assimilation

1) Planning

• Is establishing responsibilities.

• Is deciding on roles and responsibilities.

• Who will do what in the various stages and activities of staffing.activities of staffing.

• During the entire process co-ordination between Sales dept., and HRD is absolutely necessary.

Planning

• Number of Salespeople needed.

1) Decide on optimum sales force size.

2) Consider the no. of promotions.

3) Consider the no. of transfers and 3) Consider the no. of transfers and retirements.

4) Consider terminations.

Planning.

• Type of Salespeople required.

1) Conduct job analysis:

Analysis of environment in which salespeople are going to work.salespeople are going to work.

What type of customers is he going to meet?

Level of competition.

Knowledge and skills required for the job.

Planning

2) Prepare job description:

• Title of the job.( sales officer, supervisor, GM.)

• Reporting relationship.

• Products salesperson is going to sell.• Products salesperson is going to sell.

• Types of customers he would be meeting.

• Job demands and expectations.

• Posting location and area to be covered.

• Technical requirements.

2) Recruiting

• Identification of sources for recruitment.

Internal sources:

Thru employee referral programs.

Vacancies created by promotions and transfers.

External sources:External sources:

Advertisements.

Internet.

Campus interviews.

Employment agencies.

Competitors.

3) Selecting

Testing

Ref.Check

Med.exam.

Screening

Appl.Bank.

In.Intw.

Int.intw.

4) Hiring

• After the candidate is short listed co. makes a job offer to him.

• After the acceptance of job offer by the • After the acceptance of job offer by the candidate a letter of appointment is given to him.

5) Socialization and assimilation

• Socialization: Salesperson understands and learns values, norms, rules and regulations and company culture. This is done through an orientation program, where the recruit is introduced to various where the recruit is introduced to various departments.

• Assimilation: After the orientation program gets over the recruit formally mixes with the team and his/her boss.

Training of Salespeople.

• WHY IS SALES TRAINING NEEDED?• WHY IS SALES TRAINING NEEDED?

Sales training.

• To improve the salesperson’s product knowledge.

• To improve his selling skills.

• To introduce him to new selling • To introduce him to new selling techniques.

• Special training programs for higher managers like stress management, crisis management, strategic thinking etc.

Sales Training

• How are training needs identified?

• Thru Sales manager’s observations.

• Performance testing.• Performance testing.

• Sales-force audit.

• Routine/refreshers programs.

Various Training Areas

• PRODUCT KNOWLEDGE.

1) Technical features.

2) Product comparisons.

3) Technical knowledge/Technology 3) Technical knowledge/Technology change.

4) FAB analysis.

Various training areas.

• CUSTOMER KNOWLEDGE:

1) Types of customers.

2) Consumer buying behavior.

3) Customer segmentation.3) Customer segmentation.

4) Customer relationship management.

Various training areas

• COMPETITION KNOWLEDGE:

1) SWOT analysis.

2) Competition network.

3) Competition policies.3) Competition policies.

4) Competition promotion schemes.

5) Competition sales force.

6) Competition products.

7) Competition strong and weak markets.

Sales Training Methods

1) Classroom training:

Through lectures.

Through demonstrations.

Through group discussions.Through group discussions.

Through case studies.

Through Role plays.

Sales training methods.

2) On the Job training:

New sales recruit can accompany his senior on the field to observe how things are on the field to observe how things are actually managed on the field.

e.g. how to manage big dealers, how to manage institutional customers, how to manage weak dealers and markets etc.

Sales training methods

3) On line training:

This type of training is less time consuming and less costly than the other methods. This method is also becoming very This method is also becoming very popular.

• Electronic performance support system: This is a computer based training where info. is made available to the salesperson.

Sales Training methods

• Interactive multimedia training: This method is faster, cheaper and more effective and informative.

• Distance learning: It is an interactive • Distance learning: It is an interactive system thru a television network. Sales force can ask questions and get answers from experts.

• Self Study: Thru product manuals, books, articles, cd-roms, audio cd’s etc.

Personal Selling Process

• Personal selling is one-to-one persuasive selling, where a salesperson sells his product or service directly to a customer.

• One must realize that there is no magical • One must realize that there is no magical formula to make a sale, however if selling process is adopted the probability of making a sale increases.

Personal selling process

OpeningNeed.

Idn.

Pre/

DemoObj.

Hand.

Nego.Closing

SalesFollow

Up.

1) Opening

• Important points:

• Personal Appearance.

• Self introduction.• Self introduction.

• Opening remarks

Common mistake, How can I help you?

Customer: No, I am just looking.

ADOPT TO THE SITUATION.

2) Need Identification

• QUESTION AND LISTEN POSTURE.

• Salespeople should avoid the temptation of making a sales presentation without of making a sales presentation without finding out the customers needs and wants.

3) Demonstration and Presentation

• Make your demonstration and its process as simple as possible.

• Rehearse the approach to the likely objections.objections.

• Know the product USP’s well.

• Demonstration should not go wrong.

• Make sure you detail the product in a sequence.

Demonstration and presentation

• It provides an opportunity for a salesperson to convince the buyer.

• Salesperson should remember that “Customers buy benefits and not features”

Demonstration and presentation

• While selling, salespeople should use linking phrases like,

“Which means that”, “Which results into”, “Which helps you in”“Which helps you in”

Presentation should not mislead the sales person into believing that he/she should do the talking” alone”

He should ask questions and pause.

Demonstration and presentation

• Some important tips.

• TELL ME AND I WILL FORGET.

• SHOW ME AND I MAY REMEMBER.• SHOW ME AND I MAY REMEMBER.

• INVOLVE ME AND I WILL UNDERSTAND.

Demonstration and presentation

• Some important tips.

• Start the demonstration with a concise statement.

• Involve the customer into the demo.• Involve the customer into the demo.

• Make demo interesting and satisfying.

• Do not leave demo halfway.

• Sell benefits.

• Finally, summarize all the main points.

Advantages of a demonstration.

• It is a useful ancillary in selling.

• Customer objections can be overcome easily.

• Selling becomes more realistic.• Selling becomes more realistic.

• Salesperson gets a chance to interact and know the customer, which might help in relationship development.

4) Dealing with objections

• What are objections?

• Objections are expressions of interest in the product or service.the product or service.

• Objection highlight issues important to customers.

How to handle objections?

• Listen to the customer carefully and do not interrupt him.

• Agree and then counter.

• Straight denial.• Straight denial.

• Question the objection itself.

5) Negotiations.

• Where can customers negotiate?

• Price.

• Credit facility.• Credit facility.

• Delivery time.

• Schemes and offers.

6) Closing of sale

• The most important part of selling process is “asking for an order from the customer”

• The entire selling effort will otherwise go • The entire selling effort will otherwise go waste, because ultimately selling is important.

7) Follow- up

• This is an important step because it can help in building a long term relationship with the customer.

• Salesperson can ask about the product • Salesperson can ask about the product performance, service offered to him, his buying experience, service reminders and more importantly customer refferals.