238Marketing Management
LESSON
18
SALES MANAGEMENT
CONTENTS
18.0Aims and Objectives18.1Introduction18.2Objectives18.3Planning Functions18.3.1Sales Forecasting18.3.2Sales Budgeting18.3.3Selling Policy18.4Administrative Functions18.4.1Selection of Salesmen18.4.2Training of Salesmen18.4.3Control of Salesmen18.4.4Remuneration of Salesmen18.5Structure of Sales Organisation18.5.1Geographic Sales Organisation18.5.2Product-based Sales Organisation18.5.3Customer-based Sales Organisation18.5.4Activity/Function-based Organisation18.5.5Hybrid Sales Organisation18.5.6Team-based Sales Organisation18.6Organising and Managing Size of a Sales force18.7Compensation18.8Let us Sum up18.9Lesson-end Activities18.10Keywords18.11Questions for Discussion18.12Suggested Readings
18.0AIMS AND OBJECTIVES
In this lesson we shall discuss sales management. After going through this lesson youwill be able to:(i)Understand planning and administrative functions and structure.(ii)Discuss organising and managing of a sales force and compensation.
239Sales Management
18.1INTRODUCTION
Most companies structure their sales force based on geography, customers, products ora combination of these factors. For a company marketing just a single product categoryand selling to different scattered customers in one industry, a territory-based structurewould be suitable. If a company manufactures several different product categories andsells to different types of customers, it might find a customer type based sales force.
18.2OBJECTIVES
Organisation means the systematic coordination of the functions essential to achievingorganisational objectives. The objective of a sales organisation, therefore, is theperformance of various activities necessary to promote sales. The functions of salesorganisation can be classified as follows1.
Planning functions
a.Sales forecastingb.Sales budgetingc.Selling policy2.
Administrative functions
a.Selecting salesmenb.Training salesmenc.Control of salesmend.Remuneration of salesmen3.
Executive functions
a.Sales promotionb.Selling routine—execution of customers’ orders.
18.3PLANNING FUNCTIONS
18.3.1Sales Forecasting
Sales forecasting is the art that predicts the likelihood of economic activity on the basisof certain assumptions. The process of making certain estimates of future events isreferred to as sales forecasting and the figure obtained from the process is known as a‘sales forecast’. Sales forecasting would be futile if the future were known. In order todetermine the future course of events, aid is taken from an organised system of salesforecasting.Different steps in sales forecasting are:
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Defining the objectives to be achieved
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Dividing the various groups into homogenous groups
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Analysing the importance of various factors to be studied for sales forecasting
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Selecting the method
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Collecting and analysing the related information
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Drawing conclusions from the analysis made
240Marketing Management
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Implementing the decision taken
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Reviewing and revising sales forecasting techniques from time to time.
18.3.2Sales Budgeting
The sales budget is the final point of a sales organisation. All other budgets hinge on thebasis of the sales budget. What then is a sales budget? It is a forecast of sales to beachieved in the stipulated period. The sales budget can be prepared on the basis of division, brand, products, dealers, territory and sales force.The following factors need to be kept in mind when preparing a sales budget:1.Past trends2.Sales force estimates3.Trade prospects4.Present position5.Potential consumers6.Government policies7.Changing business environment8.Sales promotion strategies.
18.3.3Selling Policy
The object of a selling policy is to place the right type of goods in the hands of consumersat the right time and at the right place. Further, it should aim at attracting customers andrendering them satisfactory services. A selling policy includes:a.Method of distribution (sale)b.Terms of salec.Guarantee and serviceIn case of products involving maintenance and repairs, the seller renders what is calledafter-sale-service. Technical representatives are sent to the user’s place for repairingthe machines/gadgets free of cost or at a nominal charge. Usually, free service is renderedduring the “guarantee period”. The after-sale-service policy is a strong selling point topush up the sales of industrial/durable goods. It enhances confidence in the buyers aboutthe fitness of the product and impresses them with the seller’s concern for the customer’sconvenience and satisfaction. It also helps in getting repeat sales orders.
18.4ADMINISTRATIVE FUNCTIONS
18.4.1Selection of Salesmen
Once an organisation has determined the number and kind of salesmen it requires, thenext step is to get the right applicants, in sufficient number, for the positions. All theactivities involved in securing applications for sales positions are referred to as recruitment.There are various sources of recruitment:
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Advertisements
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Employment agencies
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Educational institutions
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Salesmen of non-competing companies
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Internal transfers
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Recommendations of present salesmen.The basic objective of the selection process is to gather information about the applicantsfor the sales job. This information is then used to predict their success/failure probabilities.
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