unit 5 sales management

8/14/2019 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

Sales and DistributionManagement


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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)

Pankaj Arora 5Sales and DistributionManagement


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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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unit 5 sales management

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