unit 5 sales management
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Sales Management
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Session 1 & 2 Sales Management
Objectives
Theories of Selling
Sales Function
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Sales
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Finished goods ininventory
Retailer
Customer
Distributo
r
Consumer
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Sales Management is defined as The Planning Direction and Control of personal selling
Including1. Recruiting,2. Selecting3. Equipping
4. Assigning5. Routing6. Supervising7. Paying and motivatingas these tasks apply to personal sales force -AMA
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Objectives Sale of Products/Services
Add profits to Business operations
Fulfill social obligations
Organizing planning and implementing the
sales efforts to achieve corporate goalsrelated to market shares, Sales Volume andreturn on investments (ROI)
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Theories of personal
selling AIDAS
Right set of circumstances
Buying formula
Behavior Equation Theory
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AIDAS Attention
Interest
Desire
Action
Satisfaction
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Right set of circumstanceso Everything was right for that sale..Sum
up Second theory. It is also called
Situation-Response theoryo This is Seller-Oriented Theory: It stress the
importance of sales person controlling thesituation.
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Buying Formula Theory
This Theory was given by late E.K.Strong Junior.
Identify the problems of the buyer Identify his needs Map your product to his needs
Provide a appropriate solution tohim and justify the sale
Need Solution Purchase Satisfaction
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Behavior Equation Theory B = P * D * K * V
where
B= Response or the internal responsetendency, i.e. The act of Purchasing a Brand
P = Predisposition
D = Present Drive (Motivation Level)
K = Incentive Potential, i.e. The Value ofProduct or its Potential Satisfaction to buyer.
V = Intensity Of all cues
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Knowledge about the
Product / Customers / Technology
Contextual knowledge to close the sale
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II Presentation & Demonstration:- The crucial
task of Selling is communicating about Productto buyer. A typical sales presentation followAIDA approach.
Usually in sales Presentation there isdemonstration.
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III Sales Resistance / Handling Objection :- During
sales presentation or at the time of closingsale, a salesman can encounter objection fromthe prospects
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IV Closing the sale: It result for order into Product
& Services. It is climax of whole game ofselling
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5 Es
1. Effective
2. Efficient
3. Enjoyable4. Enthusiastic
5. Ethical
Write an article on : An Effective Sales Manager
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Traditional Vs Relationship
Do the deal & disappear
Short term thinking and acting Building the business on deals
Getting new customers
Selling focused
Incentive for doing the deal
Race for sales result
After sales support andservice poor.
Rewards incentives for doingdealsThe deal is the end pursuit ofdeals
Negotiate a win-win & stay around
Long term thinking and acting Building the business on relationships Keeping all customers and clients
Relationship focused for results
Incentive for long term relationshipsand revenue
Swift,strong,safe and enduring resultsthrough relationship building
After sale support and service seen asinvestment in the relationship
Rewards incentives for maintainingand growing relationship and revenue
Sale just the beginning of the pursuitof the long term relationship.
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Session 3
Sales planning
Strategic role of salesmanagement
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Before We Start Sales Plan Let UsUnderstand Some Basic Term
Market Potential:- A market potential is an estimate ofthe maximum possible sales opportunity present inparticular market segment & open to all seller of agood or services during a stated future period.
Sales Potential:- A sales Potential is an estimate ofthe maximum possible sales opportunity present inparticular market segment open to specified companyselling goods or services during a stated period.
Sales Potential represent sales opportunity available to aparticular manufacturer/ Sellersuch as while a marketopportunity indicate sales opportunity available to an entireindustry
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Sales planning-Steps
1. Objective setting
2. Designing sales force-Structure & Size
3. Deciding sales force compensation
4. Recruiting and Selecting sales force
5. Training to sales people
6. Guiding and Motivating the sales force
7. Performance rating of the sales force
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Planning sales call
Looking ahead on the basis of present and immediate past.
1. Objectives
2. Scope of business
Can be daily ,weekly, monthly, quarterly or annual plan
The plan before hand makes the manager responsible forthe execution and forces a comparision between anticipated
progress and actual achievements and also searches themeans of proper implementation
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Strategic Role of SalesManagement
Key Decision areas Determine the size of sales force Decision regarding type and quality of sales force required Designing the sales organization Territory designing Recruitment and training procedures Task Allocation Compensation of Sales force Performance appraisal and control system
Feedback Mechanism to be adopted Managing channel relationships Co-ordination with Marketing Deptt.
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Sales Strategy-1
Relationship Strategy
Establishing and maintaining a partnership typerelationship internally as well as with the customer isa vital aspect of selling.
The sales force that builds a effective relationship
with the customer and provides valuable service areusually high performers and top achievers
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Sales Strategy-2
Double Win Strategy
Both customer and the sales person comeout of the sales with a sense ofsatisfaction.
The sales person is a problem solver
Results
1. Repeat business2. Future referrals
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SalesStrategy-3
Instant Service
Q-Highest Quality
C-Lowest cost
D-Least delivery times
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SalesStrategy-4
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Hard Sell
Concern for self
Talking Pushing product
Presentingfeatures
Advocatingwithoutacknowledging
Soft Sell Concern for
customer Listening Providing buying
opportunities
Presentingbenefits
Acknowledgingneeds
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Session 4
Sales Quota
Sales Territory
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Sales Quotas/targets
Refers to
an expected routine assignment to salesunits,such as territory,districts and branchesetc.
Also assigned to sales people (individual/groups) over a particular time period
and are used to plan control andevaluate selling activities of a company.
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Sales quotas
Quantitative goal that is assigned to an unit ofsales organization
SalesQuotas
Provides performance targetsProvides standardsQuotas provide controlQuotas are motivational
SalesObjectives
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Types of Quotas
Basic types
Activity
Quotas
Expense
Quotas
SalesVolum
eQuotas
Quotacombinations
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Sales Volume Quotas
Product
Line
Sales
Territories
Sales
Division
Product
Range
SalesVolumeQuotas
Sales
Districts
Sales
Offices
Sales
Force
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Expense quotas
Related to selling costs within reasonablelimits.
Sales person may receive a expensebudget which may be a percentage of theterritorys sales volume.
The sales person must spend only this
amount.
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Activity Quotas
Number of sales presentationmade
Number of service calls made Number of dealers visited
Number of calls made for recovery
Number of new accounts opened.
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WHAT IS A SALES TERRITORY?
A sales territory is composed of agroup of customers or a
geographic area assigned to asalesperson.
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WHO IS RESPONSIBLE FORTERRITORIAL DEVELOPMENT ?
Development of sales territories isusually the responsibility of the
sales manager overseeing thelarger sales units within theorganization.
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WHY ESTABLISH SALES
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WHY ESTABLISH SALESTERRITORIES?
To obtain Proper market coverage.
To establish a salespersons
responsibility. To evaluate performance.
To reduce sales expense.
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Why sales territories may not bedeveloped:
Salespeople may be more motivatedif they are not restricted.
The company may be too small.
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Session 5
Sales Control
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Sales Control
Is a function of everymanagement to ensure the
operations are being carried out asper the plan to achieve theobjectives.
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Types of Sales Control
Type ofcontrol
Primeresponsibility
Purpose of control Approaches
1 Annual PlancontrolTop LevelManagers
To Examine whether theplanned results are beingachieved
-Sales anaysis
-Mkt Shares analysis
-Mktg expenses to salesratio
2 ProfitabilityControlSales Controller To Examine where the
company is making andloosing money
Customer attitude
Tracking profitability
-Product territory-Market Share
-Trade Channel
-Order Size
-Sales audit
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Steps in designing a sales control system
Objective setting
Designing different control levels
Designing a report system andfeedback system
Deciding tools and techniques ofcontrol
Variance analysis and reasonsthereof
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Sales Audit
Sales audit is a Comprehensive periodic Systematic Independent examination
of a companys environment objectives
strategies and activities
To determine problem areas an opportunities torecommend a plan of action to improve the companyssales performance
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Aim of Audit Find the true and accurate position of
sales
To exercise control over future
planning and over the results of acompany
To analyze the past performance andlearn from the mistakes made
To bring alertness to the organization
To award increments promotions andgive extra rewards
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Session 6 & 7
Organizing the sales force
Recruitment,
Selection and
Training the sales force.
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Recruitment
Process of locating and attracting jobapplicants.
Finding potential job applicants
Provide information about companyGetting them to apply for the job
Identifying future good employees
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Recruitment Sources
Advertisements.
From Inside (friends/collegues).
Recruitment agencies.
Educational Institutes.
Competitors and other industries.
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Who does Recruiting?
Personnel manager
Higher level sales executives
At times outsourced
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How is it done?
Job description - identify the duties,requirement responsibilities and conditionsinvolved in the job.
Job analysis result of formal job analysis-should be in writing-Entails what duties andresponsibilities of a sales position are-and onwhat basis the new employee will beevaluated-is used in recruiting selectingtraining, compensationg and evaluating
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Selection Procedure
Hiring Profile
Application Scrutiny
Interview Psychological testing
Reference Check
Physical Examination
Job offer
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Training
Give a man fish he will eat it , Train a man howto catch a fish he will feed his Family.
This statement shows the importance ofTraining
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Training Process
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Training the Sales force
Aim of training
Building sales training programme
Identifying initial training needs1. Job specifications
2. Trainees background and experience
3. Sales related marketing policies
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Training Types
On Market place
On competitors
On handling competition
On communication
On negotiating
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Training Methods
Lectures
Personnel conferences
Demonstrations
Role Playing
Gaming/Simulation
On job Training
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Session 8
Compensation
Evaluation of Sales Force
(**Assignment)
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Compensation
Compensation plans for the sales forceare designed to achieve several
objectives Assist the company to meet sales
projections
To reward individual sales personsTo bring earnings to desired level
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Formal Compensation Process
Establish the salesforce objectives
DeterminecompensationObjectives andstrategies
DetermineCompensationfactors
Implement long andshort range progammes
Communicate compensation policyMeasure individual, group andOrganizational performance
Relate rewards toperformance
Appraisal and recycling
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Methods of compensation
Salary
Straight commission
Target Commission Bonus, Profit sharing, fringe benefits
Reimbursement of expenses
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Evaluation of Sales Force
Major steps
Establishing sales goals and objectives
Developing the sales plan Setting performance standards
Allocating resources and sales efforts inimplementing the sales plan
Evaluating sales force performance Implementing corrective actions
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MBO
Management by objective:
Mutual goal setting between
sales manager and salesperson
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Stages in effective performance evaluation
Performance Planning
Performance Appraisal
Performance Review
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Evaluating effort
Cost of sale
Profit contribution
Per unit sale
Repeat sale
Territory sale density
Retailer relationship
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Evaluating effort
Quotas Selling expense ratio Gross margin ratio Territorial market share- industry sales to company sales
Sales coverage effectiveness ratio- convert prospects tocustomers
Call frequency ratio Non selling activities average order size Calls per day Order call ratio Average cost per call
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