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Advance Management

Advance Management

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Amity Business School

Marketing & Sales Vision India - 2011 • Consumerism – Rising aspirations and standard of living • Online Social networks/ news group/ chatrooms • E. commerce – shopping online • Media influence on children/youth - Licensed merchandise

• Popular character Licensing arrangements across prod.
categories • Use of Brand Placement/ Integration / Celebrity testimonial • Retailers to market “experience” rather than products • Reward & incentives for profitability • Emotional connect with consumer - Reality shows/IPL/film • Global Vision, Local Focus

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Transition from Traditional living to Modern living • Home envir. Time pressure- busy lifestyle Home a comfort zone – A/c/ Durables/ Gadgets/Gym/ Home Theatre. Social Clanning/Network – frequently visits to Food joints/ courts/ cafes • Demographic • Family life cycle • Life changing events • Cultural-Social Environ. Nuclear / unitary family structures Indulgence & escape from routine Cultural values & attitude - changes

Education & well paying job - a top priority

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Marketing Head

Mgr Mgr Sales Mgr Mgr Logistics


Mgr Customer Service



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Nature and Importance of Sales Management l Integration with marketing management

- Field sales team (assigned to branches/ regions)
- HQ Marketing Team l Relationship Selling - Creating customer loyalty l Varying Sales Responsibilities - Order Taker - Delivery Sales Person - Sales Promoter/ Sales Supporter - Technical Support (team selling ) - Creative Selling (demand creator) - Problem solving selling for a B to B Sector

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Role of Sales Management
CEO President V P Sales/Mkg N S Head ZSM

BM / DSM / AM SR / Sales Person / Sales Tranees

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Emerging Trends in Sales Management
l Global Perspective l Revolution in Technology – e.g. Banking, Gas Booking Use of Internet for sourcing – Auto/ Durable/ Technology companies Desktop/ Laptop/ Internet/ Intranet/ Video conference l CRM l Diversified Sales Force - e.g. both genders with culturally diverse BG./ age l Team Selling Interaction e.g. Alcatel Tracking Mr. Sunil Mittal l Managing multi channels l Professionalism in Sales

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Selling is a task of taking the consumer thru decision process

Awareness or Consideration set (as the case may be)

Interest (information search)

Desire (evaluation) Time utility Place utility Possession utility


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Selling & buying styles Sales-techniqueoriented Push-the-productoriented

Take it or leave it

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Selling skills help the salesperson ad the sales manager to effectively utilize the selling time, to understand the customer better, and generate higher returns to the organization.
Problem-solving skills Communications skills

Selling skills Negotiation skills Listening skills

Conflict management and resolution skills


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The Communication Process Communication is the exchange of idea and information between two parties. The communication process is defined as a set of activities and systems integrated for an exchange of ideas, concepts, information, and knowledge between a sender and a receiver through alternative channels. In this process the receiver decodes the message and sends feedback to the sender so that the sender can know the effectiveness and response of his

communication inputs. Noise and disturbances are interspersed in
the communication process, which hinder the effectiveness of reception.

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Managing Body Language l Personal appearance l Posture l Gestures l Facial expressions

l Eye contact
l Space distancing Listening Skills A good listener welcomes new ideas, and stays informed, up-to-date, and out of danger in an organization. Good listening also enhances the impact of what the salesperson speaks to the customer, and increases the ability to negotiate with customers.

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The Process of Listening

The Process of Listening






Empathetic listening

Response action

Active listening


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Barriers to Listening There are various barriers to listening that include physical and mental barriers. Prejudgment is the most common barrier to listening, as it is an automatic process. People cannot handle life without having some assumptions about others and bout products and services in the society. Conflict Management Skills

Conflict is a form of relating or interacting where the sales manager finds himself under some sort of perceived threat to his individual or collective goals. These goals are Impersonal in nature. The process of identifying the nature of the conflict and taking corrective action so that the conflict will not emerge in a similar situation is termed as conflict management.
Model of Conflict Component of Conflict The Conflict Resolution Process

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Methods of Conflict Resolution l Competing: Each party pursues its own interests, regardless of the the concerns conflict. l Accommodating: One party agrees to place the opponent’s interests above its own.

impact on the other party. of bother parties.

l Collaborating: Both parties in a conflict try to satisfy fully l Avoiding: One party withdraws from or suppresses the

l Compromising: Both the parties agree to give up


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Some of the major skills and qualities required by salespeople to be effective in negotiations are: Planning, subject knowledge, listening, patience, communication, intelligence, clear thinking, integrity and trustworthiness.

Style of negotiation
I win, you lose, Both of us win You win, I lose Both of us lose

How this is achieved?
Trust and confidence Be polite and humble Identifying and agreeing to the problems rather than solutions Both side should then work together, pooling their resources, ideas and sharing information to solve the problems stated earlier.


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Negotiation Skills
Traditionally, price has been the only element of negotiation, but modern-day business has seen the emergence of new elements of negotiation, such as time of contract completion, quality levels and norms for supply of products, volume of goods, responsibility of financing, level and quantity of risk involved and who is responsible for what amount of risk, promotion and title, ownership of intellectual property rights, and level of safely and other norms of maintenance.

Bargaining is defined as a process where at least two parties are involved, the parties have some or one conflict of interest between them, they are at least temporarily joined together in a special kind of voluntary relationship, and the activity in the relationship concerns the division or exchange of one or more.

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Four principles for conducting principled negotiations that have a high probability of succeeding in a negotiation as discussed below –
l Separate the people from the problem
l Focus on interests, not on positions l Invent options for mutual gains l Insist on objective criteria

Problem-solving Skills
Besides the negotiation skills described above, one also needs problem-solving skills for effective selling. The relational and consultative selling approach suggests that a salesperson should not be a mere order taker; he should rather act as a problem-solver and a consultant to the customer. There roles are more significant for high-tech selling and business-to-business selling.

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The problem-solving process
Define the problem

Generate alternative solutions

Decide the solution

Implement the solution

Evaluate the Solution

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People generally buy for two reasons : - Objective reasons

- Subjective reasons
You will need to satisfy both. The objective reasons or rational reasons:

Car for daily commuting, personal tpt., go out on weekends ?
The subjective reasons or psychological reasons could be :
l l l

Will this car suit my lifestyle? Will it make me look good in the eyes of my peers or superiors? By buying this car what statement am I making and is that the right one for me? Does this car fit with my role as a director, father, mother, husband, wife etc.


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Buying Decision Process Sales people must understand that household and individual consumers

as well as business (or industrial) buyers pass through certain stages or
steps in buying a product. In consumer markets, individual and household consumers make buying decisions based on five mental stages of buying process . Problem (or need) Recognition Information Search (or Collection) Evaluation of Alternatives Purchase Decision Post-purchase Behaviour

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Buying Situations or Types of Purchases: For household and Individual Consumers - Routine decision-making - Limited decision-making - Extensive decision-making Buying Situations for Business Buyers: - New purchase (or new task) - Change in suppliers (or modified rebuy) - Repeat purchase (or straight rebuy)


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The Sales Process Salespeople perform many activities, which can be broadly grouped into selling activities, and non-selling activities. The selling activities consist of the various steps of the selling process. The non-selling activities include preparation of sales reports,

Prospecting and Qualifying

Preapproach (Precall Planning)


Presentation and Demonstration

Overcoming Objections

collecting payments, obtaining
market information, traveling and waiting to see customers.

Trial Close/Closing the Sales

Follow-up and Service

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Qualifying It is important that the lead, or the probable prospect is qualified (to meet the Necessary standards or conditions to receive further attention). The necessary conditions for the probable prospect or the lead to get qualified to the prospect or potential customer are :

The probable prospect has a need for the product/service being sold.
The probable prospect (could be an individual, a family, or an organization) can afford (or has an ability) to buy the product / service.

Discuss the concept of Cold/Warm /Hot prospect


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Preapproach l Information gathering l Planning and sales call - Setting call objectives l Planning the sales strategy – This type of modification to selling

objectives or plans is called adaptive selling. Salespeople often
deal with multicultural customers in domestic as well as International

sales sales

Because salespeople can change their sales presentations,
messages, or behaviour for different customers and differing situations, personal selling is referred to as adaptive selling.

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Approach Presentation and Demonstration


Understanding the buyer’s needs
Knowing sales presentation methods

Stimulus response method,

l l l

Formula method,
Need-satisfaction method, Team selling method, and Consultative selling method

Developing An Effective Presentation Demonstration

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Overcoming Objections Methods for handing and overcoming objections

Some of the common methods of handing and overcoming the sales
objections are:

Ask question

l l

Turn and objection into a benefit
Deny objections tactfully Third-party certificate




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Trial Close/Closing the Sales Trial close is one of the selling techniques. It check the attitude, or asks the opinion, of the prospect. Trial close does not ask the decision of the prospect to buy. It is used after the sales presentation, after an objection is answered, or before closing the sales. Follow-up and Service Sales Strategy-A Strategic Decision Area Classification of Accounts Relationship Strategy l Transactional relationship l Value-added relationship l Collaborative relationship Selling Methods Channel Strategy-Multi channel 27

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The Sale Function
l Supply Chain – Complete process of events and people to being products to consumers l Sales forecast – Expectation of a sales person to sell over a period of time

Selling in a multi channel Environment
l Use of EDI l Consumer portal Firms can seek Competitive advantage by creating creative channels, the way customers want to buy Sales person – the most expensive way to reach the customer

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Purifying the sales job
Outsourced sales people Independent rep. Independent agent Distributor Broker Contact centre or Call centre field rep. Co HQ, Sales People Inside sales person



retail sales rep. & Trade rep.


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Seamless Integration – An addition of a new application, routine or
device that works smoothly with the existing system. It implies that the new
feature or program can be installed and used without problems.

Alignment – getting all functional rep. to work together is the greatest
challenge facing the sales manager of today


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Leadership and Sales Executive
l Leadership is a process l Approaches to Leadership

Trait Approach 1900-1940
l Traits of some people are different from that of others l They are more intelligent./ confident/ determined / integrity/ sociable

Bahaviour Approach (1950-1960)
l This is how leader behave l Group delivers higher productivity than sum of individuals


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Situational Approach (1960-1980)
l Different Situation different style l Adapting their behavior according to the way situation demands to the best productivity of group

Contemporary perspective on Understanding Leadership (1980s-1990s)
l Motivate followers by demonstration of best practices l Leaders strive to be role models

Emerging theories of leadership (1990s-2000s)
l Mentoring and grooming subordinate, both for their professional and personal growth. l Hire more talented people than yourself so that they push oneself.

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Sales Forecast & Sales Quota Basic Terms Used in Forecasting
l Market potential l Market forecast l Sales potential (or company sales potential) l Sales forecast (or company sales forecast) l Sales budget l Sales quota

Sales Forecasting Methods: Qualitative Methods:
l Executive opinion method l Delphi method l Sales composite method l Survey of buyers’ intention method l Test marketing method

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Quantative Methods: l Moving average method l Exponential smoothing method l Decomposition method -Tends/ cycle/season/e l Ratio method –Time Series analysis l Regression analysis Purposes of the Sales Budget l Planning l Co-ordination l Control Method Used for Deciding Sales Expenditure Budget l Percentage of sales method l Executive judgment method l Objective and task method Procedure for preparation of Sales budget- Format, Worksheet , Guidelines and timetable


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Buying situation and the sale process- B to B & CRM
l l l l l Approved Vendor List Empanelment of advertising agencies New Buy Vs Modified Rebuy Vs Straight Rebuy Reverse auction -Expression of Interest (EOI) Request for Proposal (RFP)


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RFP e.g. a division of MacDonald HCL serves 3 clients in U.S. & one at australia

U. S. - Intel, Agilent Technology,

Aus/NZ – ANZ Grindlays bank

Sales person hired as MTs liaison between technical people and off shore sales people

In Supplier Vs out Supplier
What is a Buying Centre?


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Initiator (PM)

DM (Economic Head)

Screen-who decide who is giv access to DMU e.g Purchasing agent or pur. officer

Purchaser (Purchasing agent)

Gate keeper

Users Influences (Architects/Engineer)

Filters – who control the flow o information .eg. secretary

Buying Criteria Multi attribute matrix sellers have to understand weights & ratings.

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Team Selling and Multi level Selling?
Extended Team Selling – Used for major A/c , people from different department come together to service large A/c Dell & Wipro Marketing Alliances e.g. Sony Erricson & Airtel Two or more cos. combine technologies, resources , skills, processes, infrartructure – in order to offer total solution s to buyers


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B to B CRM
Retail team organization will ……. Consumer centre approach Native ………….. Relationship l Transactional ® - Product viewed as commodity all information & connect between salesperson and buyer. Established business practices l Facilitation ® l Integration ® More trust & cooperation , volume of business but lower of price Deepest relationship – Partnering sole selling supplier

Stages of B to B CRM
l Up sell – more expensive products to existing buyers l Cross-sell - New products to existing buyer Salespeople need to clearly understand who the Drivers of Demand are ?

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Leveraging Information Technologies
Cell phone, PDAs, laptops or notebooks can turn any location into a virtual office. - Access to customer records, purchase history, presentation material Knowledge management softwares – e catalog - Pricing softwares - e.g. e-pricelist

- Proposal writing software – RFP in HCL

Sales force automation (SFA)
Contact management is the use of customer databases to keep track of customer

information, Calendaring to schedule customer activities-sales call/follow-up.
Improve customer interaction with organization Use of Tricklers/prompters

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CRM Software - SAP/SAAS
l l Data mining – use of statistical procedure. sales person can build statistical model to get better understanding of a company’s customers. Campaign management – Which message to which buyer as what time e.g. Pearsons publishers of higher education books – Sales activation target to sales peopleAdoption 25 a year.

Issues in encouraging use of technology
l Training

l Management support
l Technology support l Communicating the benefits to sales force

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Sales Territories and time management Salespeople have two fundamental questions to answer in time and

territory management: What is the most efficient use of my time? What is the
most effective way to manage my territory? Salespeople should identify their personal and professional priorities and develop a time management plan. They should also develop a territory management plan and provide territory feedback to management. Salespeople who are good time and territory managers can increase productivity, improve customer relationships, and enhance their

confidence. Sales managers also benefit by ensuring territory and customer
coverage, minimizing sales expenses, assessing the sales performance of customers and products, and aligning company policies with customer expectations.

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Sales managers have two fundamental tasks to complete in time and territory management. First, they must design the most effective sales territories. The overall success of a salesperson in my territory is based in part on how well management designs the territory. The second major task is measuring the sales performance of the company’s product,

customers, and territories.
Territories are the fundamental unit of measure for evaluating various critical aspects of the company’s business, such as the success of various products, how well customers are doing compared to other customers, or historical purchasing patterns.


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Defining Sales Territory

Increase market or customer coverage- reasonable workload

l l

Control selling expenses-more time on work rather than travel
Better evaluation of s.force performance-customers & prospects Improve customer relation-partenering/ collaborating with cust.

l l

Increase salesforce effectiveness- quota achievement
Improve Co-ordination- imc elements, pop displays Benefit Salespeople and the company-topline & bottomline


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Process of outlining the sales territory

Select the basic control unit

l l

Criteria for allocation
Decide on starting point combine control unit adjacent to starting point


compare territories , conduct workload analysis
Assign Sales force to territories

Organizations like Marico industries uses GIS software,

whereas HUL uses topographic data.


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Why time and Territory Management is Important ? Reasons for Salespeople 1. Increase productivity. 2. Improve customer relationships. 3. Enhance personal confidence. Reasons for Sales Managers 1. Ensure territory and customer coverage 2. Minimize sales expenses 3. Assess sales performance 4. Align company policies with customer expectations.


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Procedure for designing Sales Territories

Select a Control Unit- States/Metros/Cities


Find Location and Potential of Customers- ABC analysis
Decide Basic Territories - Build-up method – Industrial products-call freq/ - Breakdown method – Sale forecast breakdown into terr.

Measure s.t. performance based on DCR/Invoice/Expense Collections/ Customer & channel feedback Managing Territorial Coverage
l l l

Routing, Scheduling and Time Management Scheduling Time Management Tools

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Setting Goals or Quotas
Define Quota“A Standard that states the amount a sales person should sell and how sales should be divided amongst the companies products” Why Quotas are important -Provide performance targets -Provide standard for sales person’s performance -Provide control – supervision techniques -Provide change of direction -Act as a motivational tool-Team makes efforts towards common goal.

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Types of Quota l Sales volume-Rupees sales volume or for unit sales a specified time period. l Profit quotas l Expense quotas l Activity quotas (Input based quota) e.g. general motors set targets by units of Cars/com vehicle sold. e.g. Torrent Pharmaceuticals – Sets quota by Rs. volume e.g. a lighting based company such as Phillips set quotas by activity


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Methods of Setting Sales Quota l Quotas base on Sales Forecast and Potential suitable for large organization e.g. TVS Motors/ Stanley l l l l l Quotas based on forecast only past performance – future indication Quotas base on past experience Trend projection, add an arbitnary % age. Quotas base on executive judgment Quotas based on sales people judgment Quotas based on compensation


Based on discussion with Sales people & Manager


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Advantages of Quota
Threshold goal vs. Actual goal vs. Stretch goal SMART Specific/Measurable/achievable/realistic/Time based * Tight deadline

* Goal relevant behaviour

*Energizing - Target to aim for

* Innovation to achieve goals


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How to build up a Sales Organization? Combination and regrouping of product to build up SBus e.g. Dabur. Similar products are put together in a SBU. HUL – Use of tele fonf facility ……… field sales force and corporate office leads to decision making.

Titan Watches – Decentralized Service Centres
Under the control of field SMgrs. But central target Modix Xerox – Recruiting time unit mgrs and regional target centres.

Marico Industry and P&G. – Information and logistics facility exchange to service
rural market.


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Approaches to building up a sales organization Sales organizations helps in achieving target sales, generating data explaining the behaviour of customers, and projecting trends. valuating the performance of the sales staff in similar and different territories across the markets. The traditional sales organizations can take any of the forms that include Geographic- A geographic sales organization is easy to supervise and control and helps in effective coordination portfolio can improve their efficiency by designing the organization on the basis of the product. Product- e.g. Dabur –10 categories Healthcare, Personal Care prod- Hair & oral , Ayurveda specialities, Foods- Juices, RTE products Cosmetics- Samara herbal skincare prod. Customer - Customer specialization improves efficiency by identifying key customer segments and avoiding the duplication of efforts.

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Market or Customer Based Structure
Pres Market P. Sales

S..M. Industry Customer

S.M. Wholesales

S.M. Retail

S.M. Modern Retail

United Technologies Rs. 2.,353 crores turnover frm Indian operations

Carrier Airconditioner Gurgoan

Otis Lifts & elevators Bangalore unit

Fire & Security Equip.

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Combinational design for effective sales management. For complex products needing more attention than mere selling, such as service and training to the customer, organizations can be designed on the basis of the function. The sales staff are divided as initial contact people and sales service providers. There is a high demand for serving customers at low cost. This has led the organizations to look for alternative designs for building efficient organizations and applying the emerging information technology for selling. So we find the Emergence of telemarketing for prospecting and the dissemination of product and support service information. Team-based selling also helps in providing adequate information to the customers rather than selling by individual salesperson. Organizations are building sales teams from various cross-functional areas for better customer handling and relationship building. 55

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Organizing the number of members of a Sales Force : The Size of Sales Force Break down Method – Based on S.F. Total workload Workload Method Amount of work by each SP. Additional work responsibilty Geography/ Territory based Structure - FMCG product companies Product based Structure e.g. General Electric e.g. ABB


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Recruitment Planning for sales organisation
The Decision Process for Recruiting and Selecting Salespeople
Established policy concerning responsibility for recruitment and selection. l Who will participate in the process? l Who has authority to make hiring decisions? Analyze the job and determine selection criteria l Conduct a job analysis. l Write a job description. l Develop a statement of job qualifications.

Develop and apply selection procedures to evaluate applicants. l Application blanks. l Interviews l Reference checks l Formal tests.

Find and attract a pool of applicants. l Internal sources. l External sources.

Therefore, the recruitment process should begin with a thorough analysis of the job, a job description, an a statement of the qualifications for a new hire.

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Attrition is the biggest challenge for high growth industry. Risk taking – Empower people young- global leader. Customer connect but before that there has to be ab employee connect Sunrise Sector – Retail, Real Estate, Telecom, Pharma Hospitals, Financial Services, IT & ITES Day Zero – Companies like Infosys & Cognizant hire 500 – 1000 people at campuses The challenge for HR is How does a company become an aspirational brand in the job market. Professionalism – Environment enabling them to realize their potential. Freedom to work & Innovation Best method of Recruitment WOM & Referrals (upto 30% employees is benchmark) e.g. Marriot Hotels everyone is an associate and not an employee

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Consumer Orientation Finance & Mfg. people are encouraged to got to the market/consumer homes for better insight. Leadership oriented program for young manager and a strong bottom up feedback mechanism. e.g. Johnson & Johnson Understanding Modern trade Implication for skin care products – Sending people WalMart, U.S.A – Training at Australian Unit

e.g. Dr. Reddy’s Lab
Lady joined in oncology div. in 2003, 2008 National Sales head with 2000 salespeople

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Process of Hiring Salespeople
Recruitment and Selection of Sales person Aim of recruitment is to attract qualified candidates for job Interviews. Sources of Recruitment Internal – Promoted, transferred or demoted, Rejoin Advantage - Quick filling up of vacancy - Group morale is enhanced - Lower investment in training and orientation Disadvantage – no fresh inputs, thinking and does not lead to creativity. Sources of Internal Recruitments - Promotion - Interns/part time employee - Employee referrals

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Source of External Recruitment - Industry with work experience l Customer l Supplier l Competitor - Campuses of educational institutions - Low cost recruitment, Specified time period - Employment Exchange – Database made available by Placement Consultant. - Placement consultant- Performance Guarantee - Networking referrals – Friend/Family/Social Network - Web consultants – Accessibility, Wide choice - Walk ins – Screening at Convenient locations - Response to ad – Classified & Display ad. Large no. of non desirable candidates.


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Selection Selection is the process that determines whether or not the applicant meets

the qualification for the job and it selects the candidate who is most suitable
for a given job. There is a need for clearly spelt company norms regarding whatis acceptable & what is not. Good Selection – Good impression on buyers/ customers/channels Wrong Selection – Friction within organization, loss of reputation, spoil the jobs in hand.

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Selection Procedures
l Application

form – Screening candidate

- Situational Analysis
- Job knowledge - Job requirement

Interview Techniques I.) Structured - Job related Valid predictor for job performance Point are awarded for correct answer

Stress Interview – To Annoy, embarrass, frustrate candidate
II.) Unstructured - for personality profiling Reference Check – Previous experience and education, find out aptitude towards job and performance.

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Appointment Issuance of a letter which spells out probationary period and rights after confirmation. Initial Orientation Formal orientation program organization related and job related information given to the new recruits. Policies, procedures, roles Socialization Process of Introduction to work environment, territory, chain of command, sales structure, goals.


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