1. SALES AND RETAIL
MANAGEMENT
UNIT 3

2. Sales Organization &
Functions

3. Introduction
• Sales organization is a structural framework,
specifying the formal authority and responsibility
between persons working in the organization.
• It consists of group of individuals working jointly to
attain qualitative and quantitative selling objectives.

4. Definitions
• In the words of Stiff, Cundiff and Govoni, “Sales organisation is both
an orienting point for cooperative endeavour and a structure of
human relationships. It is composed of the group of individuals,
striving jointly to reach qualitative and quantitative personal selling
objectives and bearing both informal and formal relations to one
another.”
• In the words of H. R. Tosdal, “A sales organisation consists of human
beings working together for the marketing of products manufactured
by the firm or the commodities which have been purchased for
resale.”

5. Types of sales organization
The line sales organization: hierarchical relationships,
small organizations, small product line.
Line and staff sales organization: Both hierarchical
and flat structures, medium and large organizations.
Functional sales organization: specific sales functions
like professional services
Committee sales organization: Group of sales person,
providing group services

6. Structure of the sales organization
Geographical sales structure: specific territory
for each sales person
Product specific sales structure: Wide range of
product lines, etc.
Industry based structure: Large group
conglomerates, etc.
Account- Size or customer based structures:
Based on key accounts size, etc.

7. Responsibilities and functions of
salespersons
Diagnostic: exploring the causes
Analyst: strict need analysis and identify links
Information disseminator
Strategist
Tactician
Change agent: communication of policy change, business
environment changes

8. Responsibilities
Selling
Guiding the buyers
Addressing customer complaints
Leading the subordinates
Concerning the subordinates
Reporting
Organizing
Arranging and attending sales meeting
Touring
Coordination with third parties

9. Recruitment and selection
process in Sales

10. Employment planning
Employment planning refers to the recruitment and selection of applicants for
sales jobs. Recruitment begins with the initiation of a search (i.e., prospecting for
applicants).
Once all of the activities leading up to and including the actual decision by the
applicant to accept or reject the final job are over, the recruitment process ends
for the individual applicant.
In essence, recruiters attempt to close sales by getting applicants to accept
employment offers. On the other side, applicants attempt to sell themselves to
the prospective employer, while searching for a job that will fulfill their needs and
expectations.

11. Continued….
• Recruitment involves searching for, finding, and interviewing people for the job.
Recruitment of salespeople takes the proper recruiters, budget, and amount of
time to attract and hire quality individuals. Recruiting is typically the
responsibility of the sales manager rather than the personnel department.
• College recruiting, though an expensive process, is a major source of high-quality
applicants. Many companies work hard to get top students into their interviews.
Applicants are attracted by the type of sales job, the company’s image, word of
mouth, and salaries.

12. • Selection refers to the process of selecting the best available person for the job.
The selection process is no longer based on intuitive feelings; it involves a series of steps
designed to test whether a person is right for a company and vice.
• The application form is the most common tool used in hiring. Data
collected include such information as education, work experience, and physical and
personal characteristics.
• The personal interview is an important part of the selection process. Although it is
a good method for obtaining factual information, it is often too subjective; however,
it remains the most popular tool used by managers in building a sales force. People
who meet the minimum job qualifications in the initial interview are asked back for
several in-depth interviews and often work with salespeople for a day in the field.
This gives applicants a realistic preview of what to expect from the job

13. PROCESS
• Major steps in sales
personnel selection process.
Not all companies take every
step.

14. Is Sales the Right Job for the Applicant?
• ■ What are my past accomplishments and future goals?
■ Do I want the responsibility of a sales job?
■ Do I mind travel? How much travel is acceptable?
■ How much freedom do I want in the job?
■ Do I have the personality characteristics for the job?

15. What Recruiters Look for
Applicants need to determine which industries, types of products or services,
and specific companies they are interested in.
 Find out what recruiters from different companies may look for in an applicant
to better prepare yourself.
Recruiters look for outstanding applicants who are mature and intelligent. They
must handle themselves well in the interview, demonstrating good interpersonal
skills.
They should have well-thought-out career plans and discuss them rationally.
They must have friendly, pleasing personalities. A clean, neat appearance is a
must.

16. Continued….
They should have good grades and other personal, school, and
business accomplishments.
Finally, they must have clear goals and objectives in life. The more
common characteristics on which applicants for our company are
judged are appearance, self-expression, maturity, personality,
experience, enthusiasm, and interest in the job.

17. Preparedness
The Application Letter
The Résumé
The Interview
 Create a Performance Portfolio

18. SOURCES OF RECRUTMENT
• From inside
• Recruitment agencies
• Educational establishment
• Competitors
• Unemployed

19. TRAINING AND
DEVELOPMENT

20. DEFINITION
Sales training is a process by which an
attempt to develop the selling skills so as to
increase the ability, knowledge and
experience of sales person.

21. CONCEPT
Sales training is a process of providing the
sales force with specific skills for performing
their task better and helping them to correct
deficiencies in their sales performance.

22. “ Sales training is an organised activity
involving fact finding, planning, coaching
,and purposive attempts to develop selling
skill and to these skills to selected native
ability and experience.”------Collins

23. CHARACTERISTICS
Sales training is imparted to develop selling
skills of the sales person
It develops principles and practice of selling
Sales training is a planned and organised activity
of sales department

24. IMPORTANCE
•Increase in Sales
•Stability of customers
•Low supervision cost
•Stability of sales man
•Develop better relations between customers ans
salesman

25. TRAINING PROCESS
• Identifying training needs
• Setting sales training objectives
• Deciding on the training methods
• Deciding the training programs
• Career cycle
• Evaluating Training effectiveness

26. TRAINING METHODS

31. Sales force
Motivaton,Compensation,
Incentives and Contests

32. Sales force motivation
Sales managers are concerned with motivating
salespeople at two levels: Individual and
organizational level.
Sales managers have to decide how much motivation
is needed to accomplish assigned job and goals
Finally then, they should develop a well designed
program coordinated with other sales activities

33. • What can the sales manager
do to motivate salespeople?
• A review of sales
management literature
reveals five broad classes of
factors referred to as the
motivation mix.
• Sales managers use these
factors, to motivate
salespeople.

34. • The Basic Compensation Plan
• ■ Salary.
• ■ Commissions.
• ■ Fringe benefits.
• Special Financial Incentives
• ■ Contests.
• ■ Bonuses.
• ■ Trips.
• Nonfinancial Rewards
• ■ Achievement awards.
• ■ Challenging work assignments.
• ■ Psychological rewards.
• ✮ Praise.
• ✮ Recognition.
• Management Control
Procedures
• ■ Performance evaluation.
• ■ Quotas.

35. • Nonfinancial Rewards
• ■ Achievement awards.
• ■ Challenging work assignments.
• ■ Psychological rewards.
• ✮ Praise.
• ✮ Recognition.
• Leadership Techniques
• ■ Style.
• ■ Personal contact methods
• (feedback).
• ✮ National, regional, district
• meetings.
• ✮ Individual meetings.
• ✮ Letters, telephone calls.
• ✮ Joint sales calls.

36. • Management Control Procedures
• ■ Performance evaluation.
• ■ Quotas.
• ■ Reports.

37. Compensation plans
• Straight Salary Plans:
Regular income, fixed, less performance orientation, delayed, can
lower work norms, etc. l
 best for jobs in which a high percentage of the workday devoted to
non-selling activities like routine selling jobs, lengthy preselling and
postselling services, etc.
 for which management finds it cannot effectively evaluate
performance.
•

39. • Straight Commission Plans:
If you do not sell anything, you do not earn anything.
There are two basic types of commission plans: straight commission
and draw against commission
Exhibit shows a 7 percent commission on all sales. The salesperson
must generate approximately $314,000 in sales to earn the same
$22,000 earned by the person under the straight salary plan

40. In addition to the single commission plan, multiple commission rates
are sometimes used.
For example, a 10 percent commission may be paid on the first
$100,000 of sales and 12 percent on sales over that amount in the
same year. A person who sold $300,000 would receive $34,000 in
commission [($100,000 × .10) + ($200,000 × .12) = $34,000].
When the commission rate increases, it is a progressive commission
plan.
•

41. On the other hand, some companies use a regressive plan, in which
commission rates decrease as sales increase, such as paying 12
percent on the first $100,000 and 10 percent on sales over that
amount. For sales of $300,000, the salesperson would receive
$32,000.
• Draw against commission
• The salesperson may believe that $2,000 a month is needed to meet
base expenditures for that period.

42. Thus, at the beginning of the month, a draw or advance of $2,000
against commission for that month is given. If sales for a particular
month resulted in commissions of $2,100, at the end of the month,
the company would pay $100 in commissions. Conversely, if
commissions earned for that month amounted to only $1,300, the
salesperson would owe the company $700.

43. Sales Appraisal

44. Introduction
Achieving acceptable levels of performance is essential for
the organization to stay in business and for the salesperson
to reach personal goals.
Motivation to perform at acceptable level.
Establishes a management control systems especially for
sales functions.
Performance Evaluations Let People Know Where They
Stand…??

45. Reasons for Performance Evaluation
1. To appraise a salesperson’s past
performance
2. To develop a sales plan to increase the
salesperson’s future sales
3. To motivate sales people to improve their
performance

46. Who Should Evaluate Salespeople?
Immediate superior
Sometimes several managers evaluate each salesperson.
The simplest approach is for the district manager and the regional
manager to arrive at an evaluation together.
Other district manager in the region sometimes takes part in
evaluation.
Many companies use the entire region’s management group and a
home office personnel specialist to evaluate salespeople’s work

47. Qualitative and Quantitative
performance Criteria

48. When Should Salespeople Be
Evaluated?
Salespeople should be evaluated at the end of each performance
cycle. A performance cycle is a period related to specific product goals
and/or job activities.
For example, consumer goods manufacturers typically have certain
products they want to emphasize periodically. They may have six
performance cycles during the year.
Every two months, the sales force is given specific sales goals for 5 to
10 different products. It is necessary to compare goals to results after
each cycle.

49. Conducting the Evaluation Session
Both Manager and Salesperson Should Be Prepared for the Interview
Be Positive: Both the manager and salesperson should believe that
the evaluation is a positive method of helping the salesperson do the
job better.

50. A Showcase of positive and negative appraisal
interview

53. Actual review performance: Research has shown that people tend to
evaluate themselves than their superiors.
Finalize the performance review: start with high ratings and then
work down, care should be taken in low appraisals, discuss with sales
person to remove difference of opinions
Summarize the total performance Evaluation:

54. Develop Mutually Agreed-On Objectives
Formalize Evaluation and Objectives: the
manager should write a letter to the salesperson
restating the results of the performance
evaluation and the objectives. A copy is sent to
the manager’s superior to go into the
salesperson’s permanent personnel file.

55. Sales Budget and Sales
Territory

56. Sales Budget
A sales budget is the projected amount of units a company
anticipates selling in a set period of time and the revenue it could
earn.
Typically, organizations measure this either on a monthly, quarterly
or yearly basis.
When predicting a sales budget, companies consider factors such as
previous sales patterns, activities of competitors and the current or
expected economic conditions.

57. Organizations can determine if their business is successful by
examining how closely they reach their target.
Sales managers use these to determine corrective actions to take to
be more efficient. Other benefits of calculating a sales budget include:
Improving cash flow management
Building actionable strategies to reach sales goals
Determining overhead costs
Streamlining business processes

58. Elements of a sales budget
• Elements of a sales budget
• The elements of a sales budget include:
Sales forecast
Price per unit
Total revenue

59. Developing a sales budget
1. Select a period of time
2. Gather sales prices
3. Collect sales data
4. Look at industry market trends
5. Communicate with your customers
6. Create your forecast
7. Compare results

60. The idea behind the creation of sales territories is to match the
sales opportunities with the selling effort.
A salesman is given a group of similar customers and prospects
for servicing.
In a heterogeneous market, a territory is comparatively more
homogenous.
According to Still and Cundiff (2004), a sales territory is a grouping
of customers and prospects assigned to an individual salesperson.

61. Conceptually, a territory may represent:
(a) A particular geographical area mostly.
(b) A group of customer accounts or prospects, e.g., hospitals and
institutions.
Though most of the companies emphasize geographical
territories, some companies with technical style of selling ignore
this basis and assign salespersons to a particular customer
grouping.
Geographical territories also do not matter much in insurance
selling, property selling, selling in shares and securities and
automobiles.

62. Need for establishing sales territories
• 1. To provide proper market coverage.
• 2. To control selling expenses.
• 3. To assist evaluating performance sales personnel.
• 4. To contribute to sales force morale, and
• 5. To help in the coordination of personnel selling and advertising
efforts.

63. Facts considerable while allocating
territories
Even distribution coverage
Elimination of duplication of activities
Equal opportunity
Flexibility in allocation
Economical
Allocation to new salesmen
Prospect density or the number of prospects in the specified area

64. Frequency of visits necessary
mode of transport available
Territory Shape:
There are three widely prevalent shapes the wedge, the circle and
the clover leaf.
Wedge-shaped territories are suitable for urban as well as non-
urban areas. It starts from a thickly populated urban centre such
as Marico Industries, Procter and Gamble Limited, and Hindustan
Unilever Limited.

65. Scattered customers call for a circle shaped territory. The salesman
remains at the centre of the circle or near to it. For eg. Maruti Udyog
Limited, Hyundai Motors, and Park Avenue, follow this kind of
territorial design.
Randomly located accounts call for clover-leaf type of arrangement.
Each clover-leaf represents a week’s work.