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Sales Management

The document discusses sales management, detailing its definitions, objectives, and scope, including its relationship to marketing management. It emphasizes the stages of personal selling, recruitment and selection of salespeople, as well as management's social, ethical, and legal responsibilities. Additionally, it outlines the budgeting process in sales management, highlighting the importance of sales forecasting and performance evaluation.

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Chanderprabhu Jain College of Higher Studies & School of Law Plot No. OCF, Sector A-8, Narela, New Delhi – 110040 (Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India) Semester: Fifth Semester Name of the Subject: Sales Management Unit:1-Unit:4
MEANING • In simple terms, Sales Management means management of selling activities of an organization. • According to the American Marketing association, 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.”
NATURE SYSTEMATIC PROCESS PERVASIVE FUNCTION GOAL ORIENTED CONTINUOUS PROCESS INTEGRATION WITH MARKETING MANAGEMENT EXCHANGE RELATIONSHIPS VARIETY OF JOBS
SCOPE OF SALES MANAGEMENT • SALES PLANNING • SALES ORGANISING • SALES DIRECTING • SALES COORDINATING • SALES CONTROLLING
EVOLUTION OF SALES MANAGEMENT PRIMITIVE FAMILY ECONOMY THE BARTER SYSTEM THE RISE OF MONEY SMALL SCALE MANUFACTURING INDUSTRIAL REVOLUTION
DIFFERENCE BETWEEN MARKETING MANAGEMENT AND SALES MANAGEMENT BASIS MARKETING MANAGEMENT SALES MANAGEMENT 1. CONCEPT NEW CONCEPT OLD CONCEPT 2. NATURE IT INCLUDES SALES MANAGEMENT IT IS ONE OF THE PART OF THE MARKETING MANAGEMENT 3.OBJECT TO MAXIMISE LONG TERM PROFITABILITY THROUGH CUSTOMER SATISFACTION TO MAXIMISE SALES AND PROFITA 4. SCOPE WIDE NARROW 5. LEVEL OF AUTHORITY A HIGHER LEVEL FUNCTION A LOWER LEVEL FUNCTION
OBJECTIVES • QUANTITATIVE OBJECTIVES(SHORT TERM) 1. TO RETAIN AND CAPTURE MARKET SHARE 2. TO DETERMINE SALES VOLUME IN WAYS THAT CONTRIBUTES TO PROFITABILITY 3. TO OBTAIN NEW ACCOUNTS OF GIVEN TYPES 4. TO KEEP PERSONAL EXPENSES WITHIN SPECIFIED LIMITS 5. TO SECURE TARGETED PERCENTAGE OF CERTAIN ACCOUNTS OF BUSINESS.
QUALITATIVE OBJECTIVES(LONG TERM) • TO DO THE ENTIRE SELLING JOB • TO SEARCH EXIXSTING ACCOUNTS. • TO SEARCH AND MAINTAIN CUSTOMER COOPERATION • TO ASSIST THE DEALER IN SELLING THE PRODUCT LINE • TO PROVIDE TECHNICAL ADVICE WHENEVER NECESSARY • TO ASSIST IN TRAINING OF MIDDLEMEAN’S SALES PERSONNEL. • TO PROVIDE AND ASSIST THE MIDDLEMEN. • TO COLLECT AND REPORT MARKET INFORMATION OF INTEREST AND USE TO THE COMPANY MANAGEMENT.
IMPORTANCE OF SALES MANAGEMENT REVENUE GENERATION EMPLOYMENT GENERATION REWARDING CARRER HIGHER STANDARD OF LIVING INTELLIGENCE AGENCY
EMERGING TRENDS IN SALES MANAGEMENT • TECHNOLOGICAL REVOLUTION • GLOBALISATION • E-SELLING • SALES FORCE DIVERSITY • TEAM SELLING APPROACH • CUSTOMER RELATIONSHIP MANAGEMENT • MANAGING MULTI CHANNELS • MANAGING MULTI CHANNELS • SALES PROFESSINALIZATION • SOCIAL AND EHICAL ISSUES
Management 1. The act, manner, or practice of managing; handling, supervision, or control; management of a crisis; management of factory workers. 2. The person or persons who control or direct a business or other enterprise. 3. Skill in managing; executive ability. Definition of Manager: One who handles, controls, or directs, especially a. One who directs a business or other enterprise b. One who controls resources and expenditures, as of a household
ROLES OF SALES MANAGERS Strategic roles Team Member Team leader Monitoring and control Channel management Relationship building
Skills of sales managers Human skills Managing skills Technical skills
Sales Objectives, Strategies and Tactics The main components of planning in a company are objectives, strategies and tactics. Their relationship is shown below Decide / Set Objectives Develop Strategies Evolve Tactics / Action Plans E.G. A company wants to increase sales of electric motors by 15 percent, as one of the sales objectives. (see next slide) Review & revision
To illustrate the relationship between sales objectives, strategies and tactics, consider: Sales Goals / Objectives Marketing Strategy Sales and Distribution Strategy Tactics / Action plans • Increase sales volume by 15 percent • Enter export markets • Identify the countries • Decide distribution channels • Marketing / sales head to get relevant information • Negotiate and sign agreements in 3-5 months with intermediaries • Penetrate existing domestic markets • Review and improve salesforce training, motivation and compensation • Use effective and efficient channels • Add channels and members • Train salespeople in deficient areas • Train field sales managers in effective supervision • Link sales volume quotas to the incentive scheme of the compensation plan
To illustrate the relationship between sales objectives, strategies and tactics, consider: Sales Goals / Objectives Marketing Strategy Sales and Distribution Strategy Tactics / Action plans • Reduce selling expenses by 10% • Make optimum use of existing force • Use ‘ABC Analysis’ for customer segments Sales force to focus on high potential (A Class custoners) Employ more efficient distribution channels • Use online selling & telemarketing Dealers, telemarketing & online selling to serve B & C class custoimers
THE PERSONAL SELLING PROCESS Unit-2
INTRODUCTION • Personal selling is where businesses use people (the “sales force”) to sell the product after meeting face-to-face with the customer. The sellers promote the product through their attitude, appearance and specialist product knowledge. They aim to inform and encourage the customer to buy, or at least try the product.
• Personal selling Interpersonal influence process involving a seller’s promotional presentation conducted on a person-to-person basis with the buyer. • Sixteen million people in the U.S. are employed in sales. • Personal selling is the single largest marketing expense in many firms. It is the oral presentation in a conversation with one or more prospective purchasers for the purpose of making sales; it is the ability to persuade people to buy goods & services at a profit to the seller and benefit to the buyer
Nature of Personal Selling • It involves direct personal contact between the seller and the buyer. • It is face to face and oral communication • It is the art of persuasion that converts human needs into demand. • It is the science of winning the buyer’s confidence in the seller and his product. • It is an art as well as science.
Objectives • Creation of demand • Handling objections • Exploring hidden wants • Educating customers • Building relationships • Providing feedback
Importance of personal selling • Benefits to consumers - Provide knowledge & education about new products & new uses of existing products. - Helps consumers in selecting products best suited to their needs. - Communicates grievances & suggestions of consumers to producers & traders - Enables consumers to get quality products at fair prices.
Importance of personal selling • Benefits to businessmen - Helps to locate prospective customers & create demand by winning the confidence of customers - Helps in increasing sales & profits - Explores new markets & makes new product popular - Enables businessman to secure economies of large scale production - Creates continuous demand - Provides valuable feedback about likes & dislikes of consumers - Helps to build a favorable image of company & its products.
Importance of personal selling • Benefits to society - Stimulates consumption & accelerates the rate of production - Creates employment opportunities - Increases national income of the country - Helps to raise the standard of living of people - Generates revenue for govt. - It is the basis of commerce
THE SALES PROCESS As a part of selling activities, if salespeople follow the steps or phases shown below, their chances of success are far better. Prospecting & Qualifying Preapproach / Precall planning Approach Presentation & Demonstration Follow-up & Service Trail close / Closing the sale Overcoming Objections • The sequence of above steps may change to meet the sales situation in hand. • Some of the above steps may not be applicable for selling to the trade • We now discuss application of above steps to industrial selling
STEPS OF THE SALES PROCESS • Prospecting • Preapproach • Approach • Presentation & Demonstration • Overcoming objections • Trial Close/ Closing the sale • Follow-up & Service
Transactional and Relationship selling Parameters Transactional Relationship Objective Get the order or sales Become sole or preferred supplier Focus Sales presentation, overcoming objections and closing Building trust & superior customer service Customer type and number Many customers with low profit potential Few high profit potential customers Length of relationship Short (days) Long( month/years)
Transactional and Relationship selling Parameters Transactional Relationship Sales team One or two junior level sales people Team selling with 3 to 5 junior and senior level people Selling efforts Low to medium, involving few functions High, involving many functions Pricing Strategy Competitive or lowest prices to get sales Mutually acceptable prices for profits or mutual benefits
Value Added Selling • Focus is on complete understanding of the present and future needs of the customer, and meeting those needs better than competitors, so as to obtain maximum share of the customer’s business.
RECRUITING & SELECTING SUCCESSFUL SALES PEOPLE-Unit-3
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?
DETERMINING QUALITY OF SALES FORCE 1. Job analysis: It means a careful and objective study of the selling job. The sales job is assessed in the light of the following issues: a. The business & social framework within which sales people will have to sell and in which their work will be supervised & evaluated. b. The nature & extent of competition the sales people will face. c. The industry structure & practices. d. The functions performed by sales people and how they spend their time.
DETERMINING QUALITY OF SALES FORCE (contd..) 2. JOB DESCRIPTION: Detailed & written statement of the specific functions which the salesman must perform. • Serves as the basis for application , interviews • A comprehensive job description provides a good understanding of what to look for.
DETERMINING QUALITY OF SALES FORCE (contd..) 3. JOB SPECIFICATION: A detailed and written statement of the traits that a successful salesperson must possess. a. Initiative b. Intelligence c. Balance d. Poise e. Communication skills
DESIRABLE QUALITIES • PHYSICALATTRIBUTES Attractive personality, Sound health, Cheerful, Enthusiasm and ability to work hard. • MENTALATTRIBUTES Intelligent, Imaginative, Foresightedness, Alertness, Self confidence, good behavior, enthusiasm, patience, power of taking decision, making plans, desire to initiate, sharp memory etc.
DESIRABLE QUALITIES • MORALAND SOCIALATTRIBUTES Honesty, good character, Feeling of cooperation, Feelings of accommodation, Polite behavior, Kindness • VOCATIONAL ATTRIBUTES Education, training, tastes and habits, discipline, punctual, regular, thorough knowledge of products, regional language, related laws
RECRUITMENT DEFINED • Recruitment means the process of searching for needed employees and encouraging them to apply for jobs in the company. • It involves discovering the sources of recruits that are consistent with the type of person desired, selecting the source to be used and contacting the recruits. • Securing individuals who will apply for the job.
Importance of Recruitment • Sound recruitment system = sound selection. • Risk of hiring unsuitable people will eliminate. • Continuous recruitment process will help in filling the vacancy quickly as and when it occurs. • Delayed process will result in depletion of sales force. • New recruitment necessary for expanding market.
Recruitment
Internal Sources • Transfers • Promotions • Re employment of former employees
MERITS OF INTERNAL RECRUITMENT • Least costly and time consuming • Improves morale and loyalty of sales people. • Time & cost involved in orientation and training are reduced. • Best in case of a highly technical product. • Helps to retain skilled and experienced salespersons. • Efficiency and conduct of such persons can be easily evaluated. • Internal staff does not demand high compensation.
DEMERITS • Stagnation and inefficiency. • Leads to inbreeding as fresh talent from outside does not enter. • Choice in selection is restricted. • Chances of pulls and pressures influencing the choice. • In expanding sales organizations all vacancies can not be filled from within. • May cause dissatisfaction and jealousy among sales people who are not promoted. • Existing employees may lack enthusiasm and oppose change. • Outside recruitment may bring new clients and customers.
EXTERNAL SOURCES • Advertisements • Recruitment/ Employment Agencies • Educational Institutes • Competitors (other firms) • Referrals • Internet • Other sources: customers or suppliers
MERITS OF EXTERNAL RECRUITMENT • Wide choice. • Requisite knowledge, skills, education training and experience can be obtained. • New talent can be inducted into the organization • All possible job positions can be filled in a growing firm. • New employee may bring new customer • Supervision, control and change are easier. • New ideas. • If unsuitable new recruits can be easily terminated.
DEMERITS OF EXTERNAL RECRUITMENT • Time consuming and expensive. • More time and cost involved in orientation and training. • Current employees may become dissatisfied and demoralized. • New employees takes time in understanding the organization and in adjusting to new work environment. • Post remains vacant from date of advertisement till date of joining.
Guidelines for Effective Recruitment • Plan recruitment in advance rather than crisis hiring. • Start with a well organized recruiting campaign that produces a good pool of applicants. Don’t hire the best- of - bad lot. • Continuous process- should be thoughtfully organized. • Maintain a file of potential sales candidates. • Use multiple sources of recruitment. • Select and train qualified recruiters. • Review and update recruitment programme periodically.
SELECTION
SELECTION DEFINED • Selection means choosing most suitable person out of all the applicants. • A negative or a process of rejection. • Executive judgment has a vital role to play. • Involves three steps: a. A system of techniques and procedures to measure recruits against predetermined requirements is developed. b. System is applied to the applicants. c. Actual selection is made.
IMPORTANCE • Poor selection results in mediocre selling. • Faulty selection causes high absenteeism and turnover of salespersons. • Expenses of hiring and training increase in case of faulty selection. • Selection of unqualified sales people will create a poor impression on customers. • Inefficient performance by sales people will affect the performance of other departments.
Selection Process Employment offer Physical Examination Testing Reference Check Interview Application blank Preliminary Interview
Sales Management Social, Ethical, and Legal Responsibilities of Sales Personnel-Unit-4
Sales Management Management’s Social Responsibilities Organizational Stakeholders • Customers • Community • Creditors • Government • Owners • Managers • Employees • Suppliers
Sales Management Management’s Social Responsibilities Economic Responsibilities • Produce Goods and Services • Maximize Profits Legal Responsibilities • Fulfill their Economic Goals Within a Legal Framework
Sales Management Management’s Social Responsibilities Ethical Responsibilities • Act with Equity, Fairness & Impartiality • Respect the Rights of Individuals Discretionary Responsibilities • Voluntary & Guided by Company’s • Desire to Make Social Contributions
Sales Management Management’s Ethical Responsibilities “Ethics” – A set of moral principles and values that governs the behavior of a person or a group with respect to what is right and wrong.
Some guidelines • Use an honest approach • Put your customer’s interest first • Avoid misleading sale claims • Avoid attacking competitors • Avoid misuse of company resources • Practice honesty after sales
Legal issues in sales management • Price fixing • Price discrimination • Bribes • Consumer protection
Sales budget BY-
Meaning of Sales Budget Sales budgeting is a key function of sales management. It involves estimating future level of revenue and selling expenses, and consequently the profit contribution made by the sales function. The outcome of sales budgeting is seen in the form of two documents: •The sales budget, and •The selling expenses budget.
•Sales Budget reflects the targeted sales revenue. • Sales Expense budget shows the expenses necessary to reach the targeted sales revenue. Through these two statements sales management can reconcile these revenues & expenses with the firm’s objectives. Thus, sales budgeting is concerned with improving selling efficiency & reducing the selling costs. More specifically, Sales Budget is a detailed programme developed for a specified period that indicates the anticipated sales & selling expenses.
• The sales budget is prepared by multiplying the expected unit sales volume for each product by its anticipated unit selling price. • Each of the other budgets such as production budget, direct material budget, direct labor budget, manufacturing overhead budget & Selling and administration budget depends on the sales budget. • It is derived from the sales forecast. It represents management’s best estimate of sales revenue for the budget period.
1.Planning The company formulates marketing and sales objectives; the budget determines how these objectives will be met through a detailed breakdown of the sales budget among products, territories and customers. 2. Co-ordination:- The budget establishes what the cost of various heads be thereby maintaining a desired relationship between expenditure and revenues. The budget enables sales executives to coordinate expenses with sales. It also restricts the sales executives form spending more that their share of the funds helping to prevent expenses from getting out of control. Objectives of Sales Budget:-
3. Control:- The sales budget enables sales executives for evaluating sales performance . A sales manager can improve his success by meeting sales and cost goals set forth in the sales budget. 4. Evaluation:- Sales department budgets become tools to evaluate the department’s performance. By meeting the sales & cost goals set forth in the budget, a sales manager may prove himself to be a successful executive. Sales budget can be determined on the basis of following categories Objectives of Sales Budget:-
1. The sales budget is the first component of the master operating budget. This is because sales affect all other parts of the master budget. 2. It includes the total sales valued in quantity. 3. It consists of three parts; break even, target and projected sales. 4. The budget also includes sales by product, location, customer density and seasonal sales patterns. 5. It provides a plan for both cash and credit sales. 6. The basis of a sales budget is the sale price per unit of goods to be sold multiplied by the quantity of goods to be sold. 7. A sales budget is planned around the competition, the material available, cost of distribution, government controls and the political climate. Features
•A good sales budget should serve as a guide to company with regard to its sales target. It should be flexible and resilient to the volatile changes in the market. •The budget should not put too many restraints on the sales functions of the company. • A sales budget is a financial plan for the sales of goods and services of a company. It is the basis on which all the financial decisions of a company with regard to sales are taken. •The budget also controls the general sales prospects of a company. • Online and off line marketing, marketing in the media and other advertising expenditures are planned around a sales budget. Importance
Among the major factors considered when forecasting sales are: Sales forecasting is the process of predicting sales of goods and services. Sales Forecasting 1. Past sales levels and trends 2. General economic trends 3. Economic trends in the company’s industry 4. Other factors expected to affect sales in the industry 5. Political and legal events 6. The intended pricing policy of the company 7. Planned advertising and product promotion 8. Expected action of competitors 9. New products contemplated by the company or other firms 10. Market research studies
ADVANTAGES OF A SALES BUDGET A sales budget offers the following benefits: • It is helpful in framing sales programming so as to achieve the sales targets of the firm. • It is useful in allocation of resources to different products, sales territories,etc.for realising the forecast sales. • It is helpful in keeping expenses under control so that the objectives of net profits are achieved. • It serves as a yard stick for evaluating progress and sales performance of the company. • It can reveal the areas/products in which the company needs to strengthen its position.
A sales budget comes with inherent limitations and a good sales budget is made by overcoming these limitations. 1. A sales budget cannot effectively forecast the future trends of events. 2. It may not be easily accepted by all people in the organization. 3. Preparing a sales budget takes up too much managerial time. 4. Usually sales budgets shy away from expenditure that will give returns in the long run. Limitations:
1) Situation analysis 2) Identification of problems and opportunities 3) Development of sales forecast 4) Formulation of objectives 5) Determination of sales task PROCEDURE OF SALES BUDGETING
6)Specification of resources requirements 7)Finalisation and projections 8)Presentation and review 9)Modification and revision 10)Budget approval
There are various external as well as internal factors involved that influence the sales budget of any firm. Preparing a sales budget is much tougher than an expense budget. This is because everything in the expense budget are within company control. However in the case of a sales budget, the company can only control part of factors affecting the budgeted numbers and these are called INTERENAL FACTORS. The other part is influenced by the EXTERNAL FACTORS, such as economy, competition, season and government to a certain extent. Those factors that are not within the company’s control are budgeted based on assumptions. Factors influencing Sales budget
INTERNAL FACTORS 1. Volume of sales of the enterprise. 2. Profitability of different products of the enterprise. 3. Advertising and sales promotion strategies. 4. Price policy. 5. Ability and efficiency of the salesman. These factors fall within the reach of any organization or enterprise, and hence if any improvement or changes are required, it could be easily incorporated, without any wastage of time and money.
EXTERNAL FACTORS 1. Purchasing power of the general public. 2. Industrial and taxation policy of the govt. 3. Changes in needs, habits & preference of the consumers. 4. Situation of competition in the market. 5. Distribution of wealth in the country. These factors greatly influence the sales budget of any organization in fact the sales budget of the firms are prepared in keeping the external factors in mind for the smooth running of the business.
• Affordable Method • Rule of thumb (percentage of sales method) • Competitors parity method • Objective & task method • Zero base budgeting METHODS OF SALES BUDGETING
A business manager should always go through the above mentioned factors before framing the final sales budget. The efficiency of any sales budget is dependent on how accurately these external and internal factors are considered and kept in mind by the sales manager. However external factors play a more important role in preparation of any sales budget as compared to internal factors as the former is not under the control of the organization , and also these external factors keep fluctuating from time to time. But to ignore internal factors simply means one is preparing an incomplete sales budget , thus both the factors should be kept in mind in order to make an efficient sales budget.
Sales Management

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Sales Management

  • 1.
    Chanderprabhu Jain Collegeof Higher Studies & School of Law Plot No. OCF, Sector A-8, Narela, New Delhi – 110040 (Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India) Semester: Fifth Semester Name of the Subject: Sales Management Unit:1-Unit:4
  • 2.
    MEANING • In simpleterms, Sales Management means management of selling activities of an organization. • According to the American Marketing association, 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.”
  • 3.
    NATURE SYSTEMATIC PROCESS PERVASIVE FUNCTION GOALORIENTED CONTINUOUS PROCESS INTEGRATION WITH MARKETING MANAGEMENT EXCHANGE RELATIONSHIPS VARIETY OF JOBS
  • 4.
    SCOPE OF SALESMANAGEMENT • SALES PLANNING • SALES ORGANISING • SALES DIRECTING • SALES COORDINATING • SALES CONTROLLING
  • 5.
    EVOLUTION OF SALESMANAGEMENT PRIMITIVE FAMILY ECONOMY THE BARTER SYSTEM THE RISE OF MONEY SMALL SCALE MANUFACTURING INDUSTRIAL REVOLUTION
  • 6.
    DIFFERENCE BETWEEN MARKETINGMANAGEMENT AND SALES MANAGEMENT BASIS MARKETING MANAGEMENT SALES MANAGEMENT 1. CONCEPT NEW CONCEPT OLD CONCEPT 2. NATURE IT INCLUDES SALES MANAGEMENT IT IS ONE OF THE PART OF THE MARKETING MANAGEMENT 3.OBJECT TO MAXIMISE LONG TERM PROFITABILITY THROUGH CUSTOMER SATISFACTION TO MAXIMISE SALES AND PROFITA 4. SCOPE WIDE NARROW 5. LEVEL OF AUTHORITY A HIGHER LEVEL FUNCTION A LOWER LEVEL FUNCTION
  • 7.
    OBJECTIVES • QUANTITATIVE OBJECTIVES(SHORTTERM) 1. TO RETAIN AND CAPTURE MARKET SHARE 2. TO DETERMINE SALES VOLUME IN WAYS THAT CONTRIBUTES TO PROFITABILITY 3. TO OBTAIN NEW ACCOUNTS OF GIVEN TYPES 4. TO KEEP PERSONAL EXPENSES WITHIN SPECIFIED LIMITS 5. TO SECURE TARGETED PERCENTAGE OF CERTAIN ACCOUNTS OF BUSINESS.
  • 8.
    QUALITATIVE OBJECTIVES(LONG TERM) •TO DO THE ENTIRE SELLING JOB • TO SEARCH EXIXSTING ACCOUNTS. • TO SEARCH AND MAINTAIN CUSTOMER COOPERATION • TO ASSIST THE DEALER IN SELLING THE PRODUCT LINE • TO PROVIDE TECHNICAL ADVICE WHENEVER NECESSARY • TO ASSIST IN TRAINING OF MIDDLEMEAN’S SALES PERSONNEL. • TO PROVIDE AND ASSIST THE MIDDLEMEN. • TO COLLECT AND REPORT MARKET INFORMATION OF INTEREST AND USE TO THE COMPANY MANAGEMENT.
  • 9.
    IMPORTANCE OF SALESMANAGEMENT REVENUE GENERATION EMPLOYMENT GENERATION REWARDING CARRER HIGHER STANDARD OF LIVING INTELLIGENCE AGENCY
  • 10.
    EMERGING TRENDS INSALES MANAGEMENT • TECHNOLOGICAL REVOLUTION • GLOBALISATION • E-SELLING • SALES FORCE DIVERSITY • TEAM SELLING APPROACH • CUSTOMER RELATIONSHIP MANAGEMENT • MANAGING MULTI CHANNELS • MANAGING MULTI CHANNELS • SALES PROFESSINALIZATION • SOCIAL AND EHICAL ISSUES
  • 12.
    Management 1. The act,manner, or practice of managing; handling, supervision, or control; management of a crisis; management of factory workers. 2. The person or persons who control or direct a business or other enterprise. 3. Skill in managing; executive ability. Definition of Manager: One who handles, controls, or directs, especially a. One who directs a business or other enterprise b. One who controls resources and expenditures, as of a household
  • 13.
    ROLES OF SALESMANAGERS Strategic roles Team Member Team leader Monitoring and control Channel management Relationship building
  • 14.
    Skills of salesmanagers Human skills Managing skills Technical skills
  • 15.
    Sales Objectives, Strategiesand Tactics The main components of planning in a company are objectives, strategies and tactics. Their relationship is shown below Decide / Set Objectives Develop Strategies Evolve Tactics / Action Plans E.G. A company wants to increase sales of electric motors by 15 percent, as one of the sales objectives. (see next slide) Review & revision
  • 16.
    To illustrate therelationship between sales objectives, strategies and tactics, consider: Sales Goals / Objectives Marketing Strategy Sales and Distribution Strategy Tactics / Action plans • Increase sales volume by 15 percent • Enter export markets • Identify the countries • Decide distribution channels • Marketing / sales head to get relevant information • Negotiate and sign agreements in 3-5 months with intermediaries • Penetrate existing domestic markets • Review and improve salesforce training, motivation and compensation • Use effective and efficient channels • Add channels and members • Train salespeople in deficient areas • Train field sales managers in effective supervision • Link sales volume quotas to the incentive scheme of the compensation plan
  • 17.
    To illustrate therelationship between sales objectives, strategies and tactics, consider: Sales Goals / Objectives Marketing Strategy Sales and Distribution Strategy Tactics / Action plans • Reduce selling expenses by 10% • Make optimum use of existing force • Use ‘ABC Analysis’ for customer segments Sales force to focus on high potential (A Class custoners) Employ more efficient distribution channels • Use online selling & telemarketing Dealers, telemarketing & online selling to serve B & C class custoimers
  • 18.
    THE PERSONAL SELLINGPROCESS Unit-2
  • 19.
    INTRODUCTION • Personal sellingis where businesses use people (the “sales force”) to sell the product after meeting face-to-face with the customer. The sellers promote the product through their attitude, appearance and specialist product knowledge. They aim to inform and encourage the customer to buy, or at least try the product.
  • 20.
    • Personal sellingInterpersonal influence process involving a seller’s promotional presentation conducted on a person-to-person basis with the buyer. • Sixteen million people in the U.S. are employed in sales. • Personal selling is the single largest marketing expense in many firms. It is the oral presentation in a conversation with one or more prospective purchasers for the purpose of making sales; it is the ability to persuade people to buy goods & services at a profit to the seller and benefit to the buyer
  • 21.
    Nature of PersonalSelling • It involves direct personal contact between the seller and the buyer. • It is face to face and oral communication • It is the art of persuasion that converts human needs into demand. • It is the science of winning the buyer’s confidence in the seller and his product. • It is an art as well as science.
  • 22.
    Objectives • Creation ofdemand • Handling objections • Exploring hidden wants • Educating customers • Building relationships • Providing feedback
  • 23.
    Importance of personalselling • Benefits to consumers - Provide knowledge & education about new products & new uses of existing products. - Helps consumers in selecting products best suited to their needs. - Communicates grievances & suggestions of consumers to producers & traders - Enables consumers to get quality products at fair prices.
  • 24.
    Importance of personalselling • Benefits to businessmen - Helps to locate prospective customers & create demand by winning the confidence of customers - Helps in increasing sales & profits - Explores new markets & makes new product popular - Enables businessman to secure economies of large scale production - Creates continuous demand - Provides valuable feedback about likes & dislikes of consumers - Helps to build a favorable image of company & its products.
  • 25.
    Importance of personalselling • Benefits to society - Stimulates consumption & accelerates the rate of production - Creates employment opportunities - Increases national income of the country - Helps to raise the standard of living of people - Generates revenue for govt. - It is the basis of commerce
  • 26.
    THE SALES PROCESS Asa part of selling activities, if salespeople follow the steps or phases shown below, their chances of success are far better. Prospecting & Qualifying Preapproach / Precall planning Approach Presentation & Demonstration Follow-up & Service Trail close / Closing the sale Overcoming Objections • The sequence of above steps may change to meet the sales situation in hand. • Some of the above steps may not be applicable for selling to the trade • We now discuss application of above steps to industrial selling
  • 27.
    STEPS OF THESALES PROCESS • Prospecting • Preapproach • Approach • Presentation & Demonstration • Overcoming objections • Trial Close/ Closing the sale • Follow-up & Service
  • 28.
    Transactional and Relationshipselling Parameters Transactional Relationship Objective Get the order or sales Become sole or preferred supplier Focus Sales presentation, overcoming objections and closing Building trust & superior customer service Customer type and number Many customers with low profit potential Few high profit potential customers Length of relationship Short (days) Long( month/years)
  • 29.
    Transactional and Relationshipselling Parameters Transactional Relationship Sales team One or two junior level sales people Team selling with 3 to 5 junior and senior level people Selling efforts Low to medium, involving few functions High, involving many functions Pricing Strategy Competitive or lowest prices to get sales Mutually acceptable prices for profits or mutual benefits
  • 30.
    Value Added Selling •Focus is on complete understanding of the present and future needs of the customer, and meeting those needs better than competitors, so as to obtain maximum share of the customer’s business.
  • 31.
    RECRUITING & SELECTINGSUCCESSFUL SALES PEOPLE-Unit-3
  • 32.
    RECRUITING SUCCESSFUL SALESPEOPLE ❖ 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?
  • 33.
    DETERMINING QUALITY OFSALES FORCE 1. Job analysis: It means a careful and objective study of the selling job. The sales job is assessed in the light of the following issues: a. The business & social framework within which sales people will have to sell and in which their work will be supervised & evaluated. b. The nature & extent of competition the sales people will face. c. The industry structure & practices. d. The functions performed by sales people and how they spend their time.
  • 34.
    DETERMINING QUALITY OFSALES FORCE (contd..) 2. JOB DESCRIPTION: Detailed & written statement of the specific functions which the salesman must perform. • Serves as the basis for application , interviews • A comprehensive job description provides a good understanding of what to look for.
  • 35.
    DETERMINING QUALITY OFSALES FORCE (contd..) 3. JOB SPECIFICATION: A detailed and written statement of the traits that a successful salesperson must possess. a. Initiative b. Intelligence c. Balance d. Poise e. Communication skills
  • 36.
    DESIRABLE QUALITIES • PHYSICALATTRIBUTES Attractivepersonality, Sound health, Cheerful, Enthusiasm and ability to work hard. • MENTALATTRIBUTES Intelligent, Imaginative, Foresightedness, Alertness, Self confidence, good behavior, enthusiasm, patience, power of taking decision, making plans, desire to initiate, sharp memory etc.
  • 37.
    DESIRABLE QUALITIES • MORALANDSOCIALATTRIBUTES Honesty, good character, Feeling of cooperation, Feelings of accommodation, Polite behavior, Kindness • VOCATIONAL ATTRIBUTES Education, training, tastes and habits, discipline, punctual, regular, thorough knowledge of products, regional language, related laws
  • 38.
    RECRUITMENT DEFINED • Recruitmentmeans the process of searching for needed employees and encouraging them to apply for jobs in the company. • It involves discovering the sources of recruits that are consistent with the type of person desired, selecting the source to be used and contacting the recruits. • Securing individuals who will apply for the job.
  • 39.
    Importance of Recruitment •Sound recruitment system = sound selection. • Risk of hiring unsuitable people will eliminate. • Continuous recruitment process will help in filling the vacancy quickly as and when it occurs. • Delayed process will result in depletion of sales force. • New recruitment necessary for expanding market.
  • 40.
  • 41.
    Internal Sources • Transfers •Promotions • Re employment of former employees
  • 42.
    MERITS OF INTERNALRECRUITMENT • Least costly and time consuming • Improves morale and loyalty of sales people. • Time & cost involved in orientation and training are reduced. • Best in case of a highly technical product. • Helps to retain skilled and experienced salespersons. • Efficiency and conduct of such persons can be easily evaluated. • Internal staff does not demand high compensation.
  • 43.
    DEMERITS • Stagnation andinefficiency. • Leads to inbreeding as fresh talent from outside does not enter. • Choice in selection is restricted. • Chances of pulls and pressures influencing the choice. • In expanding sales organizations all vacancies can not be filled from within. • May cause dissatisfaction and jealousy among sales people who are not promoted. • Existing employees may lack enthusiasm and oppose change. • Outside recruitment may bring new clients and customers.
  • 44.
    EXTERNAL SOURCES • Advertisements •Recruitment/ Employment Agencies • Educational Institutes • Competitors (other firms) • Referrals • Internet • Other sources: customers or suppliers
  • 45.
    MERITS OF EXTERNALRECRUITMENT • Wide choice. • Requisite knowledge, skills, education training and experience can be obtained. • New talent can be inducted into the organization • All possible job positions can be filled in a growing firm. • New employee may bring new customer • Supervision, control and change are easier. • New ideas. • If unsuitable new recruits can be easily terminated.
  • 46.
    DEMERITS OF EXTERNALRECRUITMENT • Time consuming and expensive. • More time and cost involved in orientation and training. • Current employees may become dissatisfied and demoralized. • New employees takes time in understanding the organization and in adjusting to new work environment. • Post remains vacant from date of advertisement till date of joining.
  • 47.
    Guidelines for EffectiveRecruitment • Plan recruitment in advance rather than crisis hiring. • Start with a well organized recruiting campaign that produces a good pool of applicants. Don’t hire the best- of - bad lot. • Continuous process- should be thoughtfully organized. • Maintain a file of potential sales candidates. • Use multiple sources of recruitment. • Select and train qualified recruiters. • Review and update recruitment programme periodically.
  • 48.
  • 49.
    SELECTION DEFINED • Selectionmeans choosing most suitable person out of all the applicants. • A negative or a process of rejection. • Executive judgment has a vital role to play. • Involves three steps: a. A system of techniques and procedures to measure recruits against predetermined requirements is developed. b. System is applied to the applicants. c. Actual selection is made.
  • 50.
    IMPORTANCE • Poor selectionresults in mediocre selling. • Faulty selection causes high absenteeism and turnover of salespersons. • Expenses of hiring and training increase in case of faulty selection. • Selection of unqualified sales people will create a poor impression on customers. • Inefficient performance by sales people will affect the performance of other departments.
  • 51.
    Selection Process Employment offer PhysicalExamination Testing Reference Check Interview Application blank Preliminary Interview
  • 52.
    Sales Management Social, Ethical,and Legal Responsibilities of Sales Personnel-Unit-4
  • 53.
    Sales Management Management’s SocialResponsibilities Organizational Stakeholders • Customers • Community • Creditors • Government • Owners • Managers • Employees • Suppliers
  • 54.
    Sales Management Management’s SocialResponsibilities Economic Responsibilities • Produce Goods and Services • Maximize Profits Legal Responsibilities • Fulfill their Economic Goals Within a Legal Framework
  • 55.
    Sales Management Management’s SocialResponsibilities Ethical Responsibilities • Act with Equity, Fairness & Impartiality • Respect the Rights of Individuals Discretionary Responsibilities • Voluntary & Guided by Company’s • Desire to Make Social Contributions
  • 56.
    Sales Management Management’s EthicalResponsibilities “Ethics” – A set of moral principles and values that governs the behavior of a person or a group with respect to what is right and wrong.
  • 57.
    Some guidelines • Usean honest approach • Put your customer’s interest first • Avoid misleading sale claims • Avoid attacking competitors • Avoid misuse of company resources • Practice honesty after sales
  • 58.
    Legal issues insales management • Price fixing • Price discrimination • Bribes • Consumer protection
  • 59.
  • 60.
    Meaning of SalesBudget Sales budgeting is a key function of sales management. It involves estimating future level of revenue and selling expenses, and consequently the profit contribution made by the sales function. The outcome of sales budgeting is seen in the form of two documents: •The sales budget, and •The selling expenses budget.
  • 61.
    •Sales Budget reflectsthe targeted sales revenue. • Sales Expense budget shows the expenses necessary to reach the targeted sales revenue. Through these two statements sales management can reconcile these revenues & expenses with the firm’s objectives. Thus, sales budgeting is concerned with improving selling efficiency & reducing the selling costs. More specifically, Sales Budget is a detailed programme developed for a specified period that indicates the anticipated sales & selling expenses.
  • 62.
    • The salesbudget is prepared by multiplying the expected unit sales volume for each product by its anticipated unit selling price. • Each of the other budgets such as production budget, direct material budget, direct labor budget, manufacturing overhead budget & Selling and administration budget depends on the sales budget. • It is derived from the sales forecast. It represents management’s best estimate of sales revenue for the budget period.
  • 63.
    1.Planning The company formulatesmarketing and sales objectives; the budget determines how these objectives will be met through a detailed breakdown of the sales budget among products, territories and customers. 2. Co-ordination:- The budget establishes what the cost of various heads be thereby maintaining a desired relationship between expenditure and revenues. The budget enables sales executives to coordinate expenses with sales. It also restricts the sales executives form spending more that their share of the funds helping to prevent expenses from getting out of control. Objectives of Sales Budget:-
  • 64.
    3. Control:- The salesbudget enables sales executives for evaluating sales performance . A sales manager can improve his success by meeting sales and cost goals set forth in the sales budget. 4. Evaluation:- Sales department budgets become tools to evaluate the department’s performance. By meeting the sales & cost goals set forth in the budget, a sales manager may prove himself to be a successful executive. Sales budget can be determined on the basis of following categories Objectives of Sales Budget:-
  • 65.
    1. The salesbudget is the first component of the master operating budget. This is because sales affect all other parts of the master budget. 2. It includes the total sales valued in quantity. 3. It consists of three parts; break even, target and projected sales. 4. The budget also includes sales by product, location, customer density and seasonal sales patterns. 5. It provides a plan for both cash and credit sales. 6. The basis of a sales budget is the sale price per unit of goods to be sold multiplied by the quantity of goods to be sold. 7. A sales budget is planned around the competition, the material available, cost of distribution, government controls and the political climate. Features
  • 66.
    •A good salesbudget should serve as a guide to company with regard to its sales target. It should be flexible and resilient to the volatile changes in the market. •The budget should not put too many restraints on the sales functions of the company. • A sales budget is a financial plan for the sales of goods and services of a company. It is the basis on which all the financial decisions of a company with regard to sales are taken. •The budget also controls the general sales prospects of a company. • Online and off line marketing, marketing in the media and other advertising expenditures are planned around a sales budget. Importance
  • 67.
    Among the majorfactors considered when forecasting sales are: Sales forecasting is the process of predicting sales of goods and services. Sales Forecasting 1. Past sales levels and trends 2. General economic trends 3. Economic trends in the company’s industry 4. Other factors expected to affect sales in the industry 5. Political and legal events 6. The intended pricing policy of the company 7. Planned advertising and product promotion 8. Expected action of competitors 9. New products contemplated by the company or other firms 10. Market research studies
  • 68.
    ADVANTAGES OF ASALES BUDGET A sales budget offers the following benefits: • It is helpful in framing sales programming so as to achieve the sales targets of the firm. • It is useful in allocation of resources to different products, sales territories,etc.for realising the forecast sales. • It is helpful in keeping expenses under control so that the objectives of net profits are achieved. • It serves as a yard stick for evaluating progress and sales performance of the company. • It can reveal the areas/products in which the company needs to strengthen its position.
  • 69.
    A sales budgetcomes with inherent limitations and a good sales budget is made by overcoming these limitations. 1. A sales budget cannot effectively forecast the future trends of events. 2. It may not be easily accepted by all people in the organization. 3. Preparing a sales budget takes up too much managerial time. 4. Usually sales budgets shy away from expenditure that will give returns in the long run. Limitations:
  • 70.
    1) Situation analysis 2)Identification of problems and opportunities 3) Development of sales forecast 4) Formulation of objectives 5) Determination of sales task PROCEDURE OF SALES BUDGETING
  • 71.
    6)Specification of resourcesrequirements 7)Finalisation and projections 8)Presentation and review 9)Modification and revision 10)Budget approval
  • 72.
    There are variousexternal as well as internal factors involved that influence the sales budget of any firm. Preparing a sales budget is much tougher than an expense budget. This is because everything in the expense budget are within company control. However in the case of a sales budget, the company can only control part of factors affecting the budgeted numbers and these are called INTERENAL FACTORS. The other part is influenced by the EXTERNAL FACTORS, such as economy, competition, season and government to a certain extent. Those factors that are not within the company’s control are budgeted based on assumptions. Factors influencing Sales budget
  • 73.
    INTERNAL FACTORS 1. Volumeof sales of the enterprise. 2. Profitability of different products of the enterprise. 3. Advertising and sales promotion strategies. 4. Price policy. 5. Ability and efficiency of the salesman. These factors fall within the reach of any organization or enterprise, and hence if any improvement or changes are required, it could be easily incorporated, without any wastage of time and money.
  • 74.
    EXTERNAL FACTORS 1. Purchasingpower of the general public. 2. Industrial and taxation policy of the govt. 3. Changes in needs, habits & preference of the consumers. 4. Situation of competition in the market. 5. Distribution of wealth in the country. These factors greatly influence the sales budget of any organization in fact the sales budget of the firms are prepared in keeping the external factors in mind for the smooth running of the business.
  • 75.
    • Affordable Method •Rule of thumb (percentage of sales method) • Competitors parity method • Objective & task method • Zero base budgeting METHODS OF SALES BUDGETING
  • 76.
    A business managershould always go through the above mentioned factors before framing the final sales budget. The efficiency of any sales budget is dependent on how accurately these external and internal factors are considered and kept in mind by the sales manager. However external factors play a more important role in preparation of any sales budget as compared to internal factors as the former is not under the control of the organization , and also these external factors keep fluctuating from time to time. But to ignore internal factors simply means one is preparing an incomplete sales budget , thus both the factors should be kept in mind in order to make an efficient sales budget.