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.”
(continued)

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.
(continued)

SALES MANAGEMENT:
SCOPE, OBJECTIVES & FUNCTIONS

 Functions of Sales Management: Sales
Management is responsible in performing six
important functions:
 Planning
 Organizing
 Staffing
 Directing
 Controlling
 Coordinating
(continued)

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.
(continued)

FUNCTIONS OF SALES
MANAGEMENT

 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.
(continued)

FUNCTIONS OF SALES
MANAGEMENT
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.
(continued)

FUNCTIONS OF SALES
MANAGEMENT
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.
(continued)

FUNCTIONS OF SALES
MANAGEMENT
 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.

(continued)

FUNCTIONS OF SALES
MANAGEMENT
 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 SELLING
THE BUYER-SELLER INTERRELATIONSHIP

Salesperson START Customer
Salesperson-Customer
Relationship

Role Personal Personal Role
requirement characteristics characteristics requirement
characteristics characteristics
PERSONAL
AFFILIATION Needs and
Needs and
expectations ADJUSTMENT expectations

NEGOTIATION
Choice of Choice of
ADAPT ADAPT strategy
strategy
EXCHANGE

Experience STOP Experience

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.
(continued)

SALES MANAGEMENT
PERSONAL 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.
(continued)

SALES MANAGEMENT
PERSONAL 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

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.
(continued)

THE EFFECTIVE SALES EXECUTIVE

 The seven essential prerequisites:
i) Sales perception
ii) Initiating relationships
iii) Maintaining relationships
iv) Degree of self-motivation
v) Acceptance of motivation from others
vi) Planning time and use of sales-aids
vii) 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?
(continued)

PEOPLE
 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.

(continued)

PEOPLE
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 abilities
b) Skills with people
c) Maturity
d) Motivation
e) Specific attainments
f) Working conditions
(continued)

PEOPLE
iii) Where will this person be found? There are a variety
of sources available:
a) Employment agencies
b) Recruitment and search agencies
c) Word-of-mouth
d) Personal recommendation
e) Through advertisements
f) Company’s own data bank
The choice will depend on the nature of the job and on
how many potential candidates are required.
(continued)

PEOPLE
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 screening
b) Advertising and asking for C.V.s
c) Getting potential candidates to fill up application
forms with questions specifically related to the job
d) Open-house/walk-in interviews
(continued)

PEOPLE
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 history
c) Family background d) Domestic and
financial situation
e) Health f) Leisure interests
g) Ambitions h) Future plans

(continued)

PEOPLE
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:

(continued)


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

(continued)

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”.

(continued)

2b) Analyze how motivation theories can help
the salesperson perform best by identifying
the dominant motivators from those given
below:
i) Power ii) Achievement
iii) Money iv) Social acceptance
v) Status vi) Competence
This identification can effectively suppress the
de-motivators.
(continued)


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.

(continued)

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.
(continued)

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.
(continued)

 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.
(continued)

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

(continued)

CHART NO.2 (MANAGING TIME)

CATEGORIES OF
TIME USAGE MON TUE WED THU FRI SAT TOTAL
1. SELLING TIME
WITH DECISION
MAKERS

2. SELLING TIME
WITH INFLUENCERS
3. PROSPECTING

4. REPORTING &
ADMINISTRATION
5. WAITING TIME
6. OTHER PAID
WORK/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.
(continued)

(PLANNING THE TERRITORY)
 The nine-step process: 5. Divide the territory into
1. Identify all the existing and five or six areas of
potential accounts to be workload, by the number
of calls.
visited.
6. Group the calls into
2. Assign to each account an units representing one
intended call frequency. days workload.
3. Check the workload against 7. Ensure sufficient time
capacity and adjust if for prospecting.
necessary 8. Run the proposed system
4. On a large-scale map, locate for a month. Readjust
each account. Color-code the daily allocations if
accounts for call frequency. required.
9. Review quarterly, or as
required.
(continued)

PLANNING 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:

* MON * TUE *
* * *
*
* * * *
* WED
SAT * *
*
* *
* * *
*
THU
* *
* FRI HOME *
*
* * *


 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.
(continued)

ROUTE PLANNING
THE FIGURE BELOW ILLUSTRATES THE ECONOMICAL “PETAL” SYSTEM

8
6
4

5 7
2

3
HOME
1
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.
(continued)

 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 .
(continued)


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:
(continued)

PURPOSES 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.
(continued)

 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.
(continued)

 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.
(continued)

 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.
(continued)

 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.
(continued)

CLASSIFICATION & STRUCTURES OF S.O.
FIG.1: LINE SALES ORGANIZATION

GM (SALES)

SALES MANAGER

ASM ASM ASM ASM
DIV-I DIV-II DIV-III DIV-IV

Salespeople Salespeople Salespeople Salespeople

(continued)

CLASSIFICATION & STRUCTURES OF S.O.
FIG.2: LINE AND STAFF SALES ORGANIZATION

VP (MARKETING)

STAFF GM (SALES) FUNCTIONAL

MGR (ADVTG & PR) MGR (LOGISTICS)

ASM-I ASM-II ASM-III

Salespeople Salespeople Salespeople

SALES MANAGEMENT

THANK YOU FOR YOUR
PARTICIPATION

END OF PART-I
CONTINUED AS PART-II

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