Salesmpp1

SALES MANAGEMENT(PART-I)

CORE TEXT:

“SALES MANAGEMENT”

BY

STILL, CUNDIFF & GOVONI

MODULE TUTOR:PROF. HIMMAT ADISARE

SALES MANAGEMENT

Definition: “Sales Management is the planning, direction, and control of personal selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying, and motivating, as these tasks apply to the personal sales force.”

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SALES MANAGEMENT

SCOPE, OBJECTIVES AND FUNCTIONS

SALES MANAGEMENT:SCOPE, OBJECTIVES & FUNCTIONS

• Scope and Objectives: Sales Management is responsible for organizing the sales effort, both within and outside the company. Sales Management participates in evolving key marketing decisions pertaining to budgeting, sales quota & territories, products, marketing channels, distribution policies, advertising, sales promotion, and pricing.

• The three Objectives: i) Achieving Sales Volume ii) Contribution to Profits, and iii) Continued Growth.

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SALES MANAGEMENT:SCOPE, OBJECTIVES & FUNCTIONS

Functions of Sales Management: Sales Management is responsible in performing six important functions:

Planning Organizing Staffing Directing Controlling Coordinating

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FUNCTIONS OF SALES MANAGEMENT

1. Planning: Marketing programs involve plans for achieving predetermined sales, profit, and growth objectives. Sales Management is required to determine the elements that make up the marketing program such as personal selling, advertising, mail-orders etc., and plan for the proportion of each element in the marketing program.

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Organizing: There are different order-getting departments: personal selling, mail-orders, advertising, telemarketing etc. The Sales Manager has to organize these departments in a manner that will ensure that they are not working at cross-purposes. Intra-department and Inter-department communications need to be well organized.

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Staffing (personnel Function): This involves the selection, recruitment, training, and motivation of the sales force. Different products, markets, and territories will require different types of sales people. The Sales Manager has to identify and recruit the appropriate type of sales people required for these different categories.

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Directing: Once the proper sales force has been recruited and trained, Sales Management is responsible for directing and motivating the sales force to achieve the objectives of the planned marketing program in terms of predetermined sales, profit, and growth objectives of the company.

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Control Function: In Sales Management control is exercised by the following methods:

a) Setting quantitative performance criteria against which performance can be measured.b) Collecting and processing data on actual performance of the sales force.c) Measuring and evaluating the performance of the sales force individually and as a team.d) Taking action to correct controllable variations.e) Making adjustments for uncontrollable variations.

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Co-ordination: The Sales Manager has three important co-ordination functions:

a) Co-ordination with other elements in the marketing program i.e. synchronizing with advertising, P of P displays, alerting dealers & retailers of various promos and schemes.b) Co-ordination with the distributor network in terms of product distribution, dealer identification for customers, and reconciliation of business goals.c) Co-ordination and implementation of the overall marketing strategy.This may involve a new product launch, entering new market segment, repositioning etc.

SALES MANAGEMENT

PERSONAL SELLING

PERSONAL SELLINGTHE BUYER-SELLER INTERRELATIONSHIP

STARTSalesperson-Customer

Relationship

Role requirement

characteristics

Personalcharacteristics

Personalcharacteristics

Rolerequirement

characteristics

PERSONALAFFILIATION

ADJUSTMENT

NEGOTIATION

EXCHANGE

STOP

Needs andexpectations

Needs andexpectations

Choice ofstrategy

Choice ofstrategyADAPT ADAPT

ExperienceExperience

Salesperson Customer

PERSONAL SELLING

Diverse/Different Selling Situations: Sales situations can be categorized into three mutually exclusive groups as under:

GROUP “A”:i) Inside Order Taker: Example-Sales clerk behind the counter.ii) Delivery Sales Person: Example-Newspaper salesman, milkman. iii) Route or Merchandizing Sales Person: Operates as an order-taker but works in the field. Example-Sales person for soaps, cosmetics, household goods, taking orders from retailers.iv) Missionary Sales Person: The aim is to build goodwill and educate the potential or actual user. Example-Sales person in the pharmaceutical industry.v) Technical Sales Person: Here, the emphasis is on technical knowledge. Example-The Sales Engineer, who is primarily a consultant to the client.

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SALES MANAGEMENTPERSONAL SELLING

Diverse/Different Selling Situations: GROUP “B”:

i) Creative Sales Person for Tangibles: Example-Salesperson selling automobiles, two-wheelers, washing machines, etc.ii) Creative Sales Person for Intangibles: Example-Salesperson selling insurance, education programs, advertising services etc.

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SALES MANAGEMENTPERSONAL SELLING

Diverse/Different Selling Situations: GROUP “C”:

i) “Political”/“Backdoor” Sales Person: This type sells “big deals” for items with no truly competitive features. Example-Large Government contracts/supplies.ii) Sales Person for Multiple Sales: This involves making presentations of the same product or service to several audiences where only one person can say “yes”, but all the others can say “no”. Example-Accounts Executive of an Advertising agency.

SALES MANAGEMENT

THE EFFECTIVE SALES EXECUTIVE


Introduction: Some sales jobs require little more than enormous energy and drive. Others require great perception, some others require special knowledge of the technologies associated with the product, some jobs call for commercial flair and negotiating skills, while some call for adaptability in strange and alien environments. All these varying profiles require seven essential prerequisites to define a salesperson as effective and successful.

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The seven essential prerequisites:i) Sales perceptionii) Initiating relationshipsiii) Maintaining relationshipsiv) Degree of self-motivationv) Acceptance of motivation from othersvi) Planning time and use of sales-aidsvii) Selling in widely different environments

SALES MANAGEMENT

RECRUITING SUCCESSFUL SALES

PEOPLE

RECRUITING SUCCESSFUL SALES PEOPLE

Introduction: Selecting a team is often the highest value decision for any Sales Manager. A checklist of questions in chronological sequence for the selection and recruitment process should be used as follows:i) What is the job to be filled?ii) What sort of person would do this job successfully?iii) Where will this person be found?iv) What methods will be used for applicants to respond?v) Which person should be selected and how?vi) How should the selected candidate be recruited successfully?

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It is vital to be clear about the job requirements and the kind of person who would do it best. The questions in the checklist should be addressed as under:i) What is the job to be filled? The job description must include the following features:

a) The name of the job.b) Who is the boss?c) Why the job exists-its objectives?d) How far the job holder is personally responsible

for achieving results ?e) Control & use of people, materials , and money.

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ii) What sort of person would do this job successfully? The following areas have been tried and tested in drawing up specifications for sales appointments:

a) Intellectual abilitiesb) Skills with peoplec) Maturityd) Motivatione) Specific attainmentsf) Working conditions

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iii) Where will this person be found? There are a variety of sources available:

a) Employment agenciesb) Recruitment and search agenciesc) Word-of-mouthd) Personal recommendatione) Through advertisementsf) Company’s own data bank

The choice will depend on the nature of the job and on how many potential candidates are required.

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iv) What methods will be used for applicants to respond? Various methods are available for initial screening, short-listing, and final selection. Some of these are listed below:

a) Telephonic screeningb) Advertising and asking for C.V.sc) Getting potential candidates to fill up

application forms with questions specifically related to the job

d) Open-house/walk-in interviews(continued)


v) Which person(s) should be selected and how? An interview is an unreliable method unless it is carefully planned, structured, and supported with additional information. The following areas be covered in a structured interview:

a) Education b) Work historyc) Family background d) Domestic and

financial situatione) Health f) Leisure interestsg) Ambitions h) Future plans

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vi) How should the selected candidate be recruited successfully? The following aspects should be kept in mind:

a) Handle negotiations on remuneration with flexibility depending on the deserving level of the selected candidate.

b) Answer candidates’ queries candidly.c) Inform selected candidates as early as possible.d) Keep an administrative follow up with selected

candidate regarding joining date, accommodation, travel arrangements etc.Keeping these aspects in mind, it is feasible to select and recruit a team that would be an asset to the company.

SALES MANAGEMENT

MOTIVATING THE SALES TEAM & MOTIVATION

PROGRAMS

MOTIVATING THE SALES TEAM& MOTIVATION PROGRAMS

Introduction: Once an organization has recruited a good sales team, it is essential to keep the team at a high motivational level in order to achieve the desired targets and objectives of the organization. Motivation is achieved by a combination of numerous factors that ensure a high degree of achievement and satisfaction within the sales team. Some of the aspects that are important for motivating the sales team are as under:

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As a Sales Manager:1. Consider the following:Performance = Motivation x AbilityThis highlights the fact that even average performers can achieve good results if the motivation factor is high.

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2a) Consider the de-motivators:i) Selling is a low status job.ii) The sales person works in “enemy territory”.iii) The sales person works alone.iv) The sales person has to endure considerable “ego punishment”.

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2b) Analyze how motivation theories can help the salesperson perform best by identifying the dominant motivators from those given below:i) Power ii) Achievementiii) Money iv) Social acceptancev) Status vi) CompetenceThis identification can effectively suppress the de-motivators.

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3. Outline a managerial action plan for motivating the sales force:i) Give status rewards.ii) Pay special attention to new recruits.iii) Arrange frequent sales meetings.iv) Help sales persons to handle rejection.v) Be available and understanding.

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4a) Plan realistic motivation programs on the applications given below:i) Boosting sales during a slack season.ii) Ensuring maximum effort during a seasonal peak.iii) Achieving maximum sales of a product that is shortly to be replaced by a new one.iv) Concentrating efforts on a particular brand/model within a product range.v) Increasing the call rate on new accounts.vi) Ensuring maximum effort is put behind a new product launch.vii) Getting distribution in a new range of outlets.

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4b) While mounting a motivation program keep the following factors in mind:i) Cash incentives are not always the best reward.ii) Incentives will differ from each type of sales job. iii) The presentation of the rewards/incentives must be stage-managed well to inject excitement and inspiration.iv) The rewards and incentives must be memorable, ensure recognition at all levels in the Company, and must include the family of the salesperson.v) Timing, budgeting and target-setting of program.(continued)


4c) Tax-effects/other effects on the normal income of the salesperson have to be borne in mind:i) The company should shoulder the tax-liability for all expenses forming part of the motivation program/incentive scheme.ii) Flexibility in incentive scheme should be clearly specified e.g. up to what fiscal level the company will bear expenses, beyond which, the salesperson would have to bear tax for additional expenses.In conclusion, motivation programs have to be well-planned, well-orchestrated, and implemented in a manner that ensure effective sales results.

SALES MANAGEMENT

WORKING THE TERRITORY


Introduction: Every salesperson is allocated sales targets that are to be achieved in an assigned territory. To effectively achieve these targets, the sales person needs to manage time in an efficient manner by planning daily sales calls in the given territory.

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1. Managing Time: Time management is not easy. We are living in a period of accelerating change. The speed and scope of communication mean a faster reaction time and an increased tempo of both business and life in general. It is useful to analyze how time is spent. This can be done by breaking down the week into hours spent in the activities shown in Chart No.1.A similar examination should be made of paid work and travel. The categories of time usage will vary depending on the type of job. The categories of time usage can be analyzed as shown in Chart No.2.

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CHART NO.1 (MANAGING TIME)

ACTIVITY MON TUE WED THU FRI SAT % OF TOTAL

1. PAID WORK

2. OTHER WORK

3. TRAVEL

4. LEISURE TIME

5. EATING,WASHING ETC.

6. SLEEP

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CHART NO.2 (MANAGING TIME)

CATEGORIES OFTIME USAGE MON TUE WED THU FRI SAT TOTAL

1. SELLING TIMEWITH DECISIONMAKERS

2. SELLING TIME WITH INFLUENCERS

3. PROSPECTING

4. REPORTING &ADMINISTRATION

5. WAITING TIME

6. OTHER PAIDWORK/ACTIVITY


2. Planning the Territory: The most complex aspect of organizing the salesperson’s time efficiently is the planning of the territory. Although there are several methods, planning the territory can be managed by a simple nine-step process.

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WORKING THE TERRITORY(PLANNING THE TERRITORY)

The nine-step process:

1. Identify all the existing and potential accounts to be visited.

2. Assign to each account an intended call frequency.

3. Check the workload against capacity and adjust if necessary

4. On a large-scale map, locate each account. Color-code accounts for call frequency.

5. Divide the territory into five or six areas of workload, by the number of calls.6. Group the calls into units representing one days workload.7. Ensure sufficient time for prospecting.8. Run the proposed system for a month. Readjust the daily allocations if required.9. Review quarterly, or as required.

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WORKING THE TERRITORYPLANNING THE TERRITORY

The figure below depicts how territory planning can be done for six sectors, each asterisk depicting one account and each sector depicting one days workload:

HOME

MON TUE

WED

THU

FRI

SAT

*

**

** *

*

* **

*

**

**

*

* **

**

**

*

*

** *

*


3. Route Planning: Economy in travel time can be achieved by territory planning. The key feature to such planning is the concentration of activity within a small area. However, even within this area, traveling time and distance can be kept to the minimum by using the “PETAL” system rather than by working one’s way out and driving straight back home.

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WORKING THE TERRITORYROUTE PLANNING

THE FIGURE BELOW ILLUSTRATES THE ECONOMICAL “PETAL” SYSTEM

HOME1

2

3

4

5

6

7

8

PETAL SYSTEM

LONGER ROUTE


4. Other areas where time can be saved: To reduce loss of time, the salesperson should be trained in the following activities:a) Forward weekly or fortnightly sales plans.b) Maintain telephonic/e-mail contact with

HQ rather than visiting personally.c) Make appointments strategically.d) Plan presentations in advance.e) Reduce administration & reporting time.

SALES MANAGEMENT

THE SALES ORGANIZATION


Introduction: In order to achieve the sales objectives of the organization, it is essential to develop a properly structured, coordinated, and motivated sales department with well-defined lines of authority. The present day market conditions being highly competitive, the modern day Sales Organization has to be designed on sound foundations.

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1. Sales Organization in the Modern Age: For any S.O. to be effective, the following aspects are essential:

a) Achieving both qualitative & quantitative personal-selling objectives.b) Inculcating the right mix of profit-mindedness and sales-mindedness in the S.O.c) Making the S.O. an orientation point for cooperative endeavor and a structure of human relationships.d) Developing a cohesive formal & informal relationship within the S.O.e) Keeping the S.O. adaptable and flexible to changing market situations, competition and other factors in the economy.

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2. Purposes of the Modern Day S.O. In the ideally organized S.O. there would be no duplication of efforts, least friction among the sales staff, and maximum cooperation. To achieve this, the S.O. must be clear about the purposes of its formation. Five major purposes can be clearly identified as follow:

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THE SALES ORGANIZATIONPURPOSES OF THE MODERN DAY S.O.

1. To permit the development of specialists.

2. To ensure that all necessary activities of sales are performed.

3. To achieve coordination and balance.4. To define authority.5. To economize on executive time.

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1. To permit the development of specialists: This is achieved by delegation of authority for specific tasks to specific salespersons most suited for these tasks. It is from this approach that the S.O. develops specialists in various sales functions.

For example:

a) Presentation skills b) Product knowledge (continued)


2. To ensure that all necessary activities of sales are performed: As an organization grows, the S.O. also expands & specialization increases. This results in a greater number of sales activities. When tasks are highly specialized, the danger exists that the S.O. does not provide for supervision of all activities. At this juncture, the S.O. must provide for executives specializing in CRM so that no essential activities are omitted.

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3. To achieve coordination and balance: The sum of a combined effort will exceed the individual efforts of the sales team members. Motivating individuals to work toward common objectives is important in achieving coordination and balance. By getting people to pull together as a team, the S.O. can accomplish more collectively than its members could individually.

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4. To define authority: Every person in the S.O. must be clear as to whether his/her authority is line, staff, or functional. Line authority indicates power to execute orders by those even in the lower organizational hierarchy. Staff authority is the power to suggest methods of implementation of orders to those with line authority. Functional authority indicates power given to specialists to assist those with line authority.

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5. To economize on executive time: As the activities of the S.O. increase, additional subordinates are recruited. This permits high ranking executives to delegate more authority. However, coordination is of prime importance to ensure that subordinates work in harmony. Hence, the “span of control” even if wide, must be controllable. If proper, capable, and trained subordinates are recruited to monitor routine activities and problems of the sales force, there would be economies achieved in the use of executive time. Thus, senior executives would get more time for planning.

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THE SALES ORGANIZATIONCLASSIFICATION & STRUCTURES OF S.O.

FIG.1: LINE SALES ORGANIZATION

GM (SALES)

SALES MANAGER

ASMDIV-I

ASMDIV-II

ASMDIV-III

ASMDIV-IV

Salespeople Salespeople Salespeople Salespeople

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THE SALES ORGANIZATIONCLASSIFICATION & STRUCTURES OF S.O.

FIG.2: LINE AND STAFF SALES ORGANIZATION

VP (MARKETING)

GM (SALES)

MGR (ADVTG & PR) MGR (LOGISTICS)

ASM-I ASM-II ASM-III

Salespeople Salespeople Salespeople

STAFF FUNCTIONAL

SALES MANAGEMENT

THANK YOU FOR YOUR PARTICIPATION

END OF PART-I

CONTINUED AS PART-II

Salesmpp1

Business

sales manager

sales managementbystill

sales management scope

sales promotion

sales managementparticipates

sales effort

sales management isresponsible

sales management definition