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Chapter-1 Objective and Scope of Sales Management
A. Introduction B. Objectives of Sales Management C. Sales Management and Financial Results D. Sales Management and Control E. Sizing up the Situation F. Setting Quantitative Performance Standards G. Gathering and Processing Data on Actual Performance H. Evaluating Performance I. Action to Correct Controllable Variation J. Adjusting for Uncontrollable Variation K. Conclusion
Chapter- 2 Buyer Seller Dyads and Personal Selling Situations
A. Buyer-seller Dyads
Chapter- 3 Personal Selling Situation
A. Personal Selling i. ii. iii. B. C. D. E. F. G. H. I. J. K. Group A (Service Selling) Group B (Developmental Selling) Group C (Basically Developmental Selling, but Requiring Unusual Creativity) Theories of Personal Selling AIDAS Theory of Selling Gaining interest Kindling Desire Inducing Actions Building Satisfaction Right Set of Circumstances “Buying Formula” Theory of Selling “Behavioral Equation” Theory Buyer – Seller Dyad and Reinforcement
Chapter- 4 Selling Process
A. Sale’s Influence Process B. Salesperson’s Role in Reducing Buyer Dissonance C. Prospecting D. Formulating Prospect Definitions E. Searching Out Potential Accounts F. Qualifying prospects and Determining Probable Requirements G. Relating Company Products to Each Prospect’s Requirements H. Sales resistance and sale closing I. Sales Resistance J. Sales Objection K. Closing Sales
Chapter- 5 Sales Forecasting
A. Sale Forecasting and Sale Potential B. Sales Forecasting Methods C. Jury of Executive Opinion D. The Delphi Technique E. Poll of Sales Force Opinion F. Projection of Past Sales G. Time-series Analysis H. Exponential Smoothing I. Evaluation of Past Sales Projection Methods J. Survey of Customer’s Buying Plans
Chapter- 6 Organizations of Sales Personnel
A. B. C. D. E. F. G. Functions of the Sales Executive Qualities of Effective Sales Executives Relation with Top Management Relations with Managers Other Marketing Activities Relation with Product Management Relations with Promotion Management Relations with Pricing Management
H. I. J. K. L. M. N. O.
Relations with Distribution Management The Sales Organization Purposes of Sale Organization To Permit the Development of Specialists To assure that All Necessary Activities are performed To Achieve Coordination or Balance To Define Authority To Economize on Executive Time
CHAPTER-1 OBJECTIVE AND SCOPE OF SALES MANAGEMENT
Sales management originally referred exclusively to the direction of sales force personnel. Later the term took on the broader significance-in addition to the management of personnel selling. “Sales management” meant management of all marketing activities including advertising, sales promotion, marketing research, physical distribution, pricing and product merchandising. According to American Marketing Association sales management means “the planning, direction and control of personnel selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to the personal sales force. Sales managers are responsible for organizing the sales effort, both within and outside their companies. Within the company the sales manager builds formal and informal organization structure that ensures effective communication not only inside the sales department but in its relations with other organizations units. Outside the company, the sales manager serves as the key contact with customers and other external publics and is responsible for building and maintaining an effective distribution network. Sales managers have still other responsibilities. they are responsible for ‘participating for the preparation of information critical to the making of key marketing decisions such as those on budgeting, quotas and territories. They participate- to an extent that varies with the company-in decisions on products, marketing channels and distribution policies, advertising and other promotion and pricing. Thus, the sales manager is both an administrator in charge of personal selling activity and a member of the executive group that makes marketing decisions of all types.
Objectives of Sales Management
From the company viewpoint, there are three general objectives of sales management: sales volume, contribution to profits and continued growth. Sales executive do not carry full burden of the effort to reach these objectives but they make major contributions. Top management has the final responsibility because it is accountable for the success and failure of the entire enterprise. Ultimately top management is accountable for supplying an ever increasing volume of socially responsible products that final buyers want at satisfactory prices.
these formulas become the company operating statement and are used by the board of directors and by stockholders. with benchmarks of growth projected for sales and profits in specific future dates. Sales.Top management delegates to marketing management. It provides higher management with informed estimates and facts for making marketing decisions and for setting sales and profit goals. Sales Management and Financial Results Sales management and financial results are closely related. but it can be affected directly since sales volume must be large enough to permit maintenance of targeted unit cost of production and distribution. In the process. gross margin and net profit in units of product and in dollars. sales executives provide estimates on market and sales potentials. in appraising top management performance. objectives are translated into more specific goals-they are broken down and restated as definite goals that the company has a reasonable chance of reaching. the capabilities of the sales force and the middlemen and the like. During the planning that precedes goal setting. . it is up to the sales executive to guide and lead the sales personnel and the middlemen who play critical roles in implementing the selling plans. The cost of sales factor cannot be affected directly by sales management. Once these goals are finalized. Largely on sales management’s appraisal of market opportunities. gross margin and expenses are affected by the caliber and performance of sales management and these are the major determinants of net profit. which then delegates to sales management. targets are set for sales volume. Sales management then is influential in charting the coarse of future operations. Financial results are stated in terms from two basic accounting formulas: Sales –cost of sales=gross margin Gross margin-expenses=net profit Sales management influences the numbers cranked into these formulas. Whether or not these targets are reached depends upon the performance of sales and other marketing personnel. top management uses these formulas in judging the effectiveness of sales management. sufficiently authority to achieve the three general objectives. Moreover. Periodically.
or are intended for use in the effort to reach personnel selling objectives. Where are we now? How did we get there? Where are we going? How do we get there? After satisfying themselves that the company personnel selling objectives. i.Sales Management and Control Now. UN Sizing up the Situation Sales executive start by reviewing the personal selling objectives of the firm. as are planning. organizing and coordinating. long range and short range. Sales executive control the personal selling effort of the organizational units they head. sales executive set quantitative standards against which to measure performance. they realize these objectives with respect to the present. No two salespersons or executives perform exactly alike. sales management and control are closely related in an organization. Control is part of management. even though they may operate in identical circumstances. are being used. Standard settings require continual experimentation and most standards are far from precise. policies and procedures that have been used. The purpose is to ensure that sales department objectives are reached. The several phases of control are presented in the following discussions in the normal sequence but in the real world several phases can occur simultaneously or overlap in time. sales executives find and correct weaknesses or imperfections in the sales plans and the policies and the procedures used in their implementation. Intelligent standard setting requires identification of the individuals who are responsible for the activity or group of activities being put under control. Setting Quantitative Performance Standards After ironing out planning weaknesses. iii. iv. sales executives appraise them relative to the plans. past and the future in an attempt to answer the four questions. The ultimate standard of a particular standard appropriateness is whether it contributes more to personnel selling efficiency than it costs. ii. In the coarse of sizing up the situation. Thus standards are often expressed as ranges of acceptable . are reconcilable.
Direction or pointing out more effective ways to perform certain tasks Guidelines or providing additional instructions or training and . Although it is convenient to think of a standard as a fixed value. changes in governmental activities and wars. variations outside the control of the person being appraised include those caused by rapid and unexpected changes in economic conditions. i. ii. strikes. Sales executives also keep in mind that changes in executives. The specific actions taken differ within the nature of the variation.performance. Management takes steps to move the individual performance in the direction of the standards. floods. Evaluating Performance Evaluation of performance means comparing actual results with standards. Because of differences in territorial and other conditions. Departures from standard are classified into controllable and uncontrollable variations. there should be an upper and lower limit within which human variation may take place. nor should its cost of collection and processing be more than its worth. sales management determines-at regular intervals-whether the information being reported is sufficiently important and being used often enough to justify its costs. it is difficult to compare individual performances. basic policies or other matters may alter the usefulness of the information. but management assumes one or more of three forms. However. When the performance of an organizational unit passes either of these control limits. signaling that the situation is out of control. Action to Correct Controllable Variation Management corrects the variation explained by factors within the control of the person being evaluated. Gathering and Processing Data on Actual Performance The type and amount of information needed for controlling sales depend upon the standard selected. the danger flag is up. but regardless of the nature of this information it should not be in excess of sales management real needs. it is possible to explain each individual salesperson variations from standard. Consequently. droughts and other natural disasters.
If uncontrollable variation suggests that present sales objectives are unrealistic or not in line with the current expectations. It’s not necessary that the control always produces desired outcome but may also indicate some variations. Adjusting for Uncontrollable Variation The amount of uncontrollable variation in the comparison indicates the relative need for adjusting sales plans and policies. Thus.iii. Conclusion Here we have studied the meaning and objectives of sales management. Restraint or the installation of procedures and practices aimed at keeping results within desired bounds. if the comparison of results with the standard reveals substantial uncontrollable variation. adjustment of standards to attainable levels is in order. its relationship with control happening in the organization. . These variations need to be corrected thereafter. basic revision in the objective is made.
The salesperson and the customer interacting with each other constitute one example of buyer seller dyad. Another is the interaction of a seller using advertising with a particular prospect in the reading. Personal selling is a broader concept then salesmanship. other objective factors (income. advertising etc is a means for implementing marketing programs. The opportunity for interaction is less in the advertising case than in personal selling. education) and variables that relate to personality factors (politics. Franklin Evans researched buyer seller dyads in the life insurance business. the seller seeks to motivate the prospect buyer to behave favorably towards the seller. . height). At one time. the more alike salespersons and their prospects were. Salesmanship is one aspect of the personnel selling. However. now lets understand the different selling dyads in various personal selling situations. Buyer-seller Dyads Fundamental to understanding salesmanship is recognition that it involves buyer seller interactions. smoking). Sociologists use the term “dyad” to describe a situation in which two people interact.CHAPTER-2 BUYER SELLER DYADS AND PERSONAL SELLING SITUATIONS Having understood the basics about sales management. Furthermore. Whether or not the buyer reacts as the seller desires depends upon the nature of the interaction. the greater was the likelihood that the sale would result. Salesmanship is one aspect of personal selling: It is the art of successfully persuading customers to buy products or services from which they can derive suitable benefits thereby increasing their total satisfaction. Personal selling along with other marketing elements such as pricing. advertising and personal selling often supplements or supports each other and the buyer reacts to their combined impact. religion. listening or viewing audience. the emphasis in salesmanship was almost wholly on persuasion today while recognizing the significance of persuasion the emphasis is on the benefits attractive to prospects and customers. Prospects who bought insurance knew more about salespersons and their companies and felt more positively towards them than did prospects who did not buy. In both advertising and personal selling. This was true for physical characteristics (age.
but as they actually perform. . There are indications that salespeople. and slavish adherence to canned presentations. Salespeople have been maligned and the butt of nasty stories for generations. thus improving the chance of successful dyadic relationships. where the number of prospects and the customers per salesperson is much larger. Although this did not necessarily result in a larger percentage of purchases from the salespersons. customer satisfaction with the salesperson behavior did allow the salesperson to get in the store. Henri Tosi studied dyads of wholesale drug sales people and retail pharmacists who made buying decisions. leave much to be desired in the impact they make on customers. the customers perception of what that behavior should be a necessary condition for the continuation of dyadic interaction. Tosi concluded that in addition to the physical characteristics and personality and objective factors cited by Evans.Evans finding have significance for sales management. sales personal should be assigned to prospects whose characteristics are similar to their own. than in consumer goods selling. blatant use of flattery. where there are fewer prospects about whom information is needed. When the buyer perceived the salesperson’s performance to be similar to his or her concept of ‘ideal’ performance. Whatever possible. not as stereotyped. Pairing salespersons with customers of similar backgrounds is more easily accomplished in industrial selling. failure to follow-up. People are taught from childhood to beware of tricky salesperson. general unreliability. the number of sources of sources from which purchases were made was low. Another factor influencing buyer-seller dyadic interaction is the buyers initial conditioning with respect of selling. commercial dishonesty and so forth. bad manners. Studies of the attitudes of buyers and purchasing agents reveal that many are critical of the salespersons lack of product knowledge.
persons delivering milk. Mcmurry and Arnold classify positions on a spectrum ranging from the very simple to the highly complex. the engineering salesperson. for example. iv. Considerable diversity exists among personal selling situations and it is helpful to distinguish between service and developmental selling. for example. iii. Service selling aims to obtain sales from existing customers whose habits and patterns of thought are already conducive to such sales. Bread or fuel oil Route or Merchandising salesperson-Operates as an order taker but works in the fieldthe soap or spice salesperson calling on retailers is typical. Missionary-aims only to build goodwill or to educate the actual or potential user and is not expected to take an order. for example. the sales clerk behind the neckwear counter in a men’s store.CHAPTER-3 PERSONAL SELLING SITUATIONS Personal Selling The different personal selling situations encountered by salesmen. Different sales positions require different amount and kinds of service and developmental selling. the distiller’s missionary and the pharmaceuticals company’s “detail person” v. who is primarily a consultant to “client” companies. Delivery salesperson-Mainly engages in delivering the product. for example. Developmental selling aims to convert prospects into customers. They categorize sales positions into three mutually exclusive groups each containing subgroups total of nine subgroups in all: Group A (Service Selling) i. Inside order taker-“waits on: customers. Technical salesperson-emphasizes technical knowledge. . ii. in other words it seeks to create customers out of people who do not currently view salesperson company favorably and who likely are resistant to changing present sources of supply.
usually a committee. advertising professionals.Sales are consummated through rendering highly personalized services to key decision makers in customers organizations. the salesperson has to work to retail it.Group B (Developmental Selling) i. These theories. The first approach distilled the experiences of successful salespeople and to a lesser extent. salespersons selling vacuum cleaners. for example. based on the experimental knowledge accumulated from years of “living in the market” rather than on a systematic fundamental body of knowledge. advertising services and educational programs Group C (Basically Developmental Selling. ii. golfing . salespersons selling insurance. but all of whom can say “no’. for example the account executive of an advertising agency who makes presentations to the “agency selection committees” of advertisers-even after the account is obtained. siding and encyclopedias Creative salesperson of intangibles-for example. Creative salesperson of tangibles-for example. ii. particularly commodities or items with no truly competitive features.” “indirect. the fact that some as science and considers selling by some as art has produced two contrasting approaches to the theory of selling. are subject to Howard’s . 46 percent perceived selling as an art. 8 percent as a science and a 46 percent as an art evolving into a science. Many such persons succeeded because of their grasp of practical or learned through experience psychology and their ability to apply it in sales situations.” or “back-door” salesperson-sell big-ticket items. but Requiring Unusual Creativity) i.blondes or the like. only one of which can say “yes”. the salesperson who lands large orders for flour from baking companies by catering to key buyers interests in fishing. “Political. It is not too surprising that these selling theories emphasize the “what to do” and “how to do “rather than the “why”. Salesperson engaged in multiple sales-involves sale of big ticket items where the sales person must make presentations to several individuals in the customers organization. Theories of personal selling What do you think about selling? Is selling a science with easily taught basic concepts or an art learned through experience? In a survey of 173 marketing executives. automobiles.
the behavioral equation emphasizes the buyer decision process but also takes the salespersons influence process into account. In this course pack. for once the conversation starts to wander.K. this phase presents on problem. Jr. neatness. or an excuse. the prospect mind passes through five mental states: attention.” Favorable first impressions are assured by. professor of psychology at the Stanford Graduate School of Business. The first two. The fourth. Here AIDAS stands for attention. The goal is to put the prospect into a receptive state of mind. among other things. was a pioneer in this effort and his “buying formula” theory is presented later in this course pack. During the successful selling interview. The third.” Experimental knowledge can be unreliable”. interest. the “AIDAS” theory and the “right set of circumstances” theory are seller oriented. The late E. to survive the start of the interview. The second approach borrowed findings from the behavioral sciences.Strong. a salesperson must possess considerable mental alertness. action and satisfaction. friendliness. . The salesperson needs an ample supply of “conversation openers. Conversation openers that cannot be readily tied in with the reminder of the presentation should be avoided. Skilled sales personnel often decide upon conversation openers just before the interview so that those chosen are as timely as possible Generally it is advantageous if the opening remarks are about the prospect (people like to talk and hear about themselves) or if they are favorable comments about the prospect’s business. interest. and great skill is required to return to the main theme. AIDAS Theory of Selling This theory is the basis for many sales and advertising texts and is the skeleton around which many sales programs are organized. desire. the “buying formula” theory of selling is buyer oriented. If the salesperson previously has made an appointment. for conducting the interview. since he or she realizes that the caller is bent on selling something. according to this theory. Implicit in this theory is the notion that the prospect goes through these five states consciously. proper attire. desire. action and satisfaction. and be a skilled conversationalist. The prospect’s guard is naturally up. The first few minutes of the interview are crucial.dictum. A good conversation opener causes the prospect to relax and sets the stage for the total presentation. The salesperson must establish good rapport at once. and a genuine smile. but experienced sales personnel say that even with an appointment. so the sales presentation must lead the prospect through them in the right sequence if a sale is to result. The sales person has to have a reason. we will examine four theories.
and when conversation resumes. Time is saved and the chance of making sale improved if objections are anticipated and answered before the prospect raises them. Obstacles must be faced and ways found to get around them. When the product is bulky or technical. but to get back to the subject……. or other visual aids serve the same purpose. Objections need answering to the prospect’s satisfaction. The development of sales obstacles. but sometimes distracting digression is best handled bluntly. Some salespeople develop a contagious enthusiasm for the product or a sample. “well. External interruptions cause breaks in the presentation.buy point. for example. usually of the question and answer variety. Many techniques are used to gain interest. flipcharts. its timeliness. sales portfolios. prospects interests are affected by basic motivations.” . Digressive remarks generally should be disposed of tactfully. closeness of the interview subject to current problems.Gaining Interest The second goal is to intensify the prospect’ attention so that it evolves into strong interest. good salespeople summarize what has been said earlier before continuing. skeptical.to . which the salesperson then uses in selecting the best approach. Throughout the interest phase. But even experienced sales personal do considerable probing. the prospect’s objections. external interruptions. In addition. Kindling Desire The third goal is to kindle the prospect’s desire to the ready. Sometimes. the prospect drops hints. the hope is to search out the selling appeal that is most likely to be effective. and their mood-receptive. The more experienced the salesperson. To encourage hints by the prospect. The salesperson must keep the conversation running along the main line toward the sale. the more he or she has learned from interviews with similar prospects. that’s all very interesting. or hostile-and the salesperson must take all these into account in selecting the appeal to emphasize. Others ask the prospect questions designed to clarify attitudes and feelings toward the product. with finesse. and digressive remarks can sidetrack the presentation during this phase. some salespeople devise stratagems to elicit revealing question. before identifying the strongest appeal.
the salesperson should reassure the customer that the decision was correct. the more skilled the salesperson is in handling the set of circumstances. Furthermore. The customer should be left with the impression that the salesperson merely helped in deciding. Thus. and attending to such matters as making certain that the order is filled as written. If the salesperson succeeds in securing the attention and gaining the interest of the prospect. However. and the trick close are used to test the prospect’s reactions. it is up to the salesperson to sense when the time is right. and following up on promises made. the close on a minor point. Building Satisfaction After the customer has given the order.” The salesperson and the remark are external factors. But it is better to ask for the order straightforwardly. buying is not automatic and. from which they think there is no retreat. had its psychological origin in experiments with animals and hold that the particular circumstances prevailing in a given selling situation cause the prospect in a predictable way. the prospect is ready to act that is. These are the presence or absence of desires . must be induced. suppose that the salesperson says to the prospect. The order is the climax of the selling situation.Inducing Actions If the presentation has been perfect. “Right Set of Circumstances” Theory of Selling “Everything was right for that sale” sums up the second theory” This theory. so the possibility of an anticlimax should be avoidedcustomers sometimes unwell themselves and the salesperson should not linger too long. sometimes called the “situation-response” theory. Building satisfaction means thanking the customer for the order. the sale) will result. “let’s go out for a cup of coffee. Most prospects find it is easier to slide away from hints than from frank requests for an order. the desired response (that is. The trial close. as a rule. the more predictable is the response. To use a simplified example. Experienced sales personnel rarely try for a close until they are positive that the prospect is fully convinced of the merits of the proposition. to buy. The set of circumstances includes factors external and internal to the prospect. But are least four factors internal to the prospect affect the response. Some sales personnel never ask for a definite “yes” or “no” for fear of getting a “no”. and if the salesperson presents the proper stimuli or appeals.
but the internal factors are not readily manipulated. To have it now. This theory purports to answer the question: What thinking process goes on in the prospect’s mind that causes the decision to buy or not to buy? The buying formula is a schematic representation of a group of responses. Since the salesperson’s normal inclination is to neglect the internal factors. are strongly influenced by internal factors) and deemphasizes the external factors. arranged in psychological sequence. Jr. Several psychologists also advanced explanations similar to the buying formula. The buyer’s needs or problems receive major attention. and fails to assign appropriate weight to the response side of the situation-response interaction. ii. iv. but recognizable versions appear in a number of early books on advertising and selling by authors who had experiential knowledge of salesmanship. on the assumption that the salesperson. will not overlook them. iii.i. of course. To go our. and the following stepby. The origin of this theory is obscure. This is a seller-oriented theory: it stresses the importance of the sales person controlling the situation. Sales personnel who try to apply the theory experience difficulties traceable to internal factors in many selling situation. the third emphasizes the buyer’s side of the buyerseller dyad.step explanations adapted from his teaching and writings. the mental processes involved in a purchase are Need (or problem) solution Purchase . and To go out with the salesperson Proponents of this theory tend to stress external factors and at the expense of internal factors. “Buying Formula” Theory of Selling In contrast to the two previous theories.Strong.. the formula is a convenient way to help the salesperson remember. To have a cup of coffee. being naturally conscious of the external factors. and the salesperson’s role is to help the buyer find solutions. Reduced to their simplest elements.K. does not handle the problem of influencing factors internal to the prospect. The name “buying formulas” was given to this theory by the late E. The buying formula theory emphasizes the prospect’s responses (which. They seek selling appeals that evoke desired responses.
Thus. he or she needs a pleasant feeling to ward both the product or service and the trade name. the buyer must know why the product or service is adequate solution to the need or problem. the buying formula is: Need or product and /or trade name purchase satisfaction/dissatisfaction Problem service To ensure purchase. and why the trade name is the best one to buy. and some things are liked and bought that are admittedly not as good as competing items. company. and. In the world of selling and buying. whenever the buyer’s buying habit is challenged by a friend’s remark. the purchaser proceeds mentally from need or problem top problem to product or service. When a buying habit is being established. . In many cases. upon using the product or service. and the buyer must experience a (pleasant) feeling of anticipated satisfaction when thinking of the product and /or service and the trade name. others are adequate but not liked. the solution will always be a product or service or both and they will belong to a potential seller. Similar reasoning applies to trade names.Because the outcome of a purchase affects the chance that a continuing relationship will develop between the buyer and the seller. a competing salesperson’s presentation. and with a minimum of feeling and its association. it is necessary to add a fourth element. the buyer needs reason to defend the purchase. The four elements then. or sales person) In buying anything. the individual is conscious of a deficiency of satisfaction. on the central line of the formula. Product (and/or service) and Trade name (name of manufacturer. to trade name. and because nearly all sales organizations are interested in continuing relation ships. the product or service and the trade name (that is. Some sources of supply are both adequate and liked. In purchasing. but his is not always so. are Need (or problem) Solution Purchase satisfaction whenever a need is felt or a problem recognized. or a competitor’s advertisement. an item viewed as adequate is also liked. when a definite buying habit has been established. Most purchases are made with scarcely a thought as to why. The buyers also must have a pleasant feeling toward the product or service and the trade name. All this is represented by the dashed lines in the formula. Some products and services that are quite adequate are not liked. and vice versa. the source of supply) must be considered adequate. the element “solution” involve two parts: i. in addition. those. still others are liked but patronized even though they are inadequate compared to competing sources. and. Then. The primary elements in a well established buying habit are those connected by solid lines. ii. to purchase. he or she experience satisfaction or dissatisfaction.
If the prospect does not think of the product or service when he or she feels the need or recognizes the problem. and differences among answers are differences in emphasis upon the elements in the formula. vi. repeat buying occurs. If need or problem. emphasis should be put upon establishing in the prospects’ minds the adequacy of the trade-named product or service. If sales to new prospects are desired. vii. v. product or service.) . (Developing new uses is comparable to selling to new uses is comparable to selling to new customers. emphasis should be put upon facilitating purchase and use. iv. If more sales to old customers are desired. it may be said that:: i. As long as they are present. every element in the formula should be presented. ii. the association between need or problem and product or service should be emphasized iii. the need or problem should be emphasized. Without going into detail. and pleasant feelings toward it. Where the emphasis should be placed depends upon a variety of circumstances. If competition is felt. If the prospect does not think of the trade name when he or she thinks trade name should be emphasized. If the prospect does not feel a need or recognize a problem that can be satisfied by the product or service. The answer to each selling problem is implied in the buying formula. the latter should be reminded.Reasons (adequacy of solution) and pleasant feelings constitute the elements of defense in the buying habit. and trade name are well associated.
pain. any may operate at any time even though the buyer is not contemplating a purchase There are two kinds a. ii. and sex. Product cues are external stimuli received from the product directly. They are elaborations of the innate drives. Howard explains buying behavior in terms of the purchasing decision process. Insofar as marketing is concerned. the learned drives are dominant in economically advanced societies Cues are weak stimuli that determine when the buyer will respond i. No triggering cues influence the decision process but do not activate it. Informational cues are external stimuli that provide information of a symbolic nature about the product. viewed as phases of the learning process. Learned drives. and incorporating findings from behavioral research. or price.“Behavioral Equation” Theory Using a stimulus-response model(a sophisticated version of the “right set of circumstances”). J. and reinforcement. weight. conversations with other people (including sales personnel). Innate drives stem from the physiological needs. Such stimuli may come from advertising. described as follows: Drives are strong internal stimuli that impel the buyer’s response. There are two kinds i. b. and so on. such as striving for status or social approval. Four essential elements of the learning process included in the stimulus response. thirst.A. for example. cold. Triggering cues influence the decision process for any given purchase. such as hunger. ii. are acquired when paired with the satisfying of innate drives. color of the package. serving as a façade behind which the functioning of the innate drives is hidden. .
Changing Marketing Systems: proceedings of the 1967 winter Conference of the American Marketing Association. reinforcement occurs. the probability increases that the buyer will the product (or patronize the supplier) the next time the cue appears. No matter how much P there may be. 1967. product. that is. Irwin. technically. This model was later refined further by Professor Howard. . if any independent variable as zero value. After reinforcement. and. In other words.). when the satisfaction yields a reward. if the individual is unmotivated (D = 0). for example. working in collaboration withjagdish N.: Richard D. Seth. published by the American Marketing Association.” in Reed Moyer (ed. (Homewood. force of habit D = present drive level (amount of motivation) K = “incentive potential. Thus. III. the act of Purchasing a brand or patronizing a supplier P = predisposition or the inward response tendency.Specific product and information cues may also happen when price triggers the buyer’s decision. Analysis and Planning. that is. See their “A Theory of Buyer Behavior. The relation among the variables is multiplicative. Howard’s Marketing Management. 1963) we are indebted to the author for permission to include this condensation. predisposition (p) increases in value. Response is what the buyer does? Reinforcement is any event that strengthens the buyer’s tendency to make a particular response. B will also be zero and there is no response. there is no response.in other words. or informational “This is a condensed version of the explanation contained in J. the buyer has learned. what is reinforced is the tendency to make a response in the future to the cue that immediately preceded the rewarded response. Each time there is a responsea purchase – in which satisfaction (k) is sufficient to yield a reward. re Ed. the value of the product or its potential Satisfaction to the buyer V = intensity of all cues: triggering. Howard incorporates these four elements into an equation B = P * D * K* V Where B = response or the internal response tendency.A.” that is.
The salesperson provides the buyer with a product (and the necessary information about it and its uses) that the buyer needs. warm conversation. Salespersons attempt to receive rewards (reinforcements) either in sentiment or economic by changing their own behavior or getting buyers to change theirs. The salesperson wishes to sell a product. or expressions of different degrees of liking or social approval. it is helpful to separate economic aspects from social features. praise. . and the buyer wished to buy it—these are the economic feathers. Behavior concerning these features of the relationship consists of sentiments. and the like. who. Each can also reward the other by another type of behavior. each can display a type of behavior that is rewarding. this satisfaction of the need is rewarding to the buyer. in turn. that is reinforcing.Buyer – Seller Dyad and Reinforcement In the interactions of a salesperson and a buyer. Each participant also places a value and cost upon the social features. The salesperson gives social approval to a buyer by displaying high regard with friendly greetings. In understanding the salesperson-client relation. that of providing social approval. to the other. can reward the salesperson by buying the product.
however. people expose themselves to information that they perceive as likely to support their choice. When the buyer has stopped learning-when the buyer’s buying behavior becomes automatic. and to avoid information likely to favor rejected alternatives. the salesperson can very the intensity of his or her effort. writes that a buyer may panic on reaching the point of decision and rush into the purchase as an escape from the problem or put it off because of the difficulty of deciding. the salesperson. Recognizing that the buyer’s dissonance varies both according to whether the product is . by helping to clarify these. Finally. comes from using the product. the salesperson again exerts influence through D. the buyer’s goals. Reducing pre-and post decision anxiety or dissonance is an important function of the salesperson. It seems. When the buyer has narrowed down the choices to a few sellers. so making the difference in V (the intensity of all cues). by communicating the merits of the merits of the company brand. After decisions.the salesperson influences D by providing triggering cues. then. The salesperson exerts influence through D (amount of motivation). Hunk. or both. anxiety or dissonance will almost always occur because the decision has unattractive as well as attractive features. this influence being strong when the buyer seeks information in terms of informational cues. it seems reasonable that it should hold for pre-decision anxiety. for example. The greatest effect on P. Salesperson’s Role in Reducing Buyer Dissonance According to Festinger’s theory of cognitive dissonance.CHAPTER-4 SELLING PROCESS Salesperson’s Influence Process The process by which the salesperson influences the buyer is explainable in term of the equation B =P XD x k x v. for instance. can cause it to appear relatively better. If the ends to be served are not clearly defined. and thus affect K (its potential satisfaction for the buyer). when individuals choose between two or more alternatives. Although Festinger evidently meant his theory to apply only to post decision anxiety. that a buyer can experience either procession or post decision dissonance. The salesperson influences P (predisposition) directly. through interacting with the buyer in ways rewarding to the buyer.
being new. They arrange travel and call schedules to economize on time spent enroute and distance traveled. They look for ways to “stretch” productive selling time. To emphasize the advantages of the product purchased. but insofar as it does occur. and To show that many characteristics of the chosen item are similar to products the buyer has forgone. They make appointments to avoid prolonged waiting for callbacks. They do not waste time trying to sell to people who cannot buy . the salesperson is effective because the salesperson is trusted by the buyer. dissonance. An established product-an ongoing salesperson-client relationship. Prospecting Efficient organization of time and through planning of work is earmarks of above-average salespersons. An established product-a new salesperson-client relationship. and whether the salesperson client relation is ongoing or new. ii. but which are approved by the reference groups. the buyer experiencing cognitive dissonance needs reassuring that the decision is or was a wise one. Unless the market is unstable.an established or a new one. How can a salesperson facilitate the buyer’s dissonance reduction? Two ways are i. these are four types of cases involving the salesperson’s role. the salesperson can reduce dissonance iv. is less effective in reducing dissonance iii. i. In other words. and the salesperson is less capable of providing it. in which no learning is involved and thus experiences little. the buyer tends toward automatic response behavior. ii. especially if it is an important product. Because of the established relationship with the buyer. A new product-and ongoing salesperson-client relationship. if any. the buyer experiences dissonance. Unless the buyer generalizes from personal experience with an established similar product. A new product-a new salesperson-client relationship The buyer needs dissonance reduction. The salesperson. while stressing the disadvantages of the forgone alternatives. the salesperson provides information that permits the buyer to renationalize the decision.
they may be inaccessible to the salesperson. may need insurance and be willing and able to pay for it. for instance. Qualifying prospects and determining probable requirements.or are not likely to do so. any characteristics typical of profitable accounts but not shared by unprofitable accounts should be detected. Step in Prospecting The steps in prospecting are i. too much to calling on nonprospects. there is other requirement Unique to each company’s customers. and they must be available to the salesperson. and Relating company products to each prospect’s requirements Formulating Prospect Definitions Prospective customers must have the willingness. Many sales personnel devote too little time to prospecting and. Key characteristics that identify profitable .” Improvement in prospecting is one way to stretch productive selling time. so it is important to ascertain which persons in each firm Have the authority to buy. is called prospecting. but a particular salesperson may have no way to make the contact. The planning work. and the authority to buy. These identifying characteristics ideally should be ones recognizable from information appearing in directories or lists. which is essential in eliminating calls on no buyers. Salespersons waste time if they try to sell to the wrong persons. Some companies use specialized personnel for prospecting. as a consequence. Salespersons waste time when they attempt to sell individuals who have neither need for the product or money to pay for it. are readily identified from classified listings in telephone and city directories. the financial capacity. Salespersons who are proficient in prospecting apply their selling efforts productively. Formulating prospect definitions. iv. Prospects in many businesses and professions. The president of a large corporation. Searching out potential accounts. Starting with data on the profitability of present accounts. ii. but most regard it as one of the salesperson’s they often have access to information on likely prospects that is not available to central office personnel. they do not call on non-prospects and can devote their full attention to those likely to buy. iii. In addition to meeting the stated requirements. Although individuals may qualify as prospects in other respects. for example.
From what the salesperson knows about the company’s product needs. credit reports. their uses. Relating Company Products to Each Prospect’s Requirements The final step is to plan the stratify for approaching each prospect. Sources of prospect information include directories of all kinds. unless their growth possibilities show promise. Searching Out Potential Accounts Using the prospect definations. Qualifying prospects and Determining Probable Requirements As information is assembled on each tentative prospect (i. These visits may not bring in sales. and records or service requests. Salespeople selling services. as prospects are separated from non-prospects. sales personnel of no competing firms calling on the same general classes of trade. membership lists of chambers of commerce and trade and manufacturers’ associations. it is usually possible to determine each prospect’s probable needs. From what the salesperson knows about the company’s products.’ as they are called. bankers and other “centers of influence’” and the salesperson’s own observations. voluntarily or on request. news and notes in trade papers and business magazines. members of their professional.” for example. insurance. and applications. it is easier to estimate the probable requirements of each for types of products sold by the company. . or “suspect. conventions and meetings. lists purchased from list brokers. religious. Another source of prospects is the “endless chain” –satisfied customers suggest. but they save time.e.accounts are assembled into descriptions of the various classes of customers. additional information often is required to qualify certain prospects. From the information assembled.” suspect”). Prospect Company. and social organizations. Even after tapping all readily available information sources. the salesperson combs different sources for the names of probable prospects. and the referrals of friends. Prospects with requirements too small to represent profitable business are removed from further considered. Other sources are responses to company advertising. and personal visits by salespersons may be the only way to obtain it. he or she selects those that seem most appropriate for a particular prospect. and these are the prospect definitions. other leads to the salesperson who served them. uncover prospects among their acquaintances.
and it is tailored to fit the prospect. inaccuracy. not an objection and the salesperson helps the prospect to circumvent it by explaining a method for financing the purchase. it blocks the sale. Obstacles to Sales Obstacle are real or apparent reasons that the prospect has for not buying. at worst. others cannot. or they may have doubt about the appropriateness of the product to fulfill those needs. and determining how to persuade the prospect to become a customer. it precludes the consummation of the sale. Sincere objections trace to incompleteness. But it is apparent. and by voicing objections. or vagueness in the sales presentation. sincere or insincere. the salesperson determines whether or not there is a way to get around it. In analyzing sales resistance. A prospect’s expressed sales resistance is either an obstacle or an objection. when an obstacle arises. Prospects may not recognize the nature of their needs. If the salesperson recognizes the specific obstacle and knows a way to circumvent it. A prospect says a temporary shortage of cash prevents buying an obstacle. an objection requires a satisfactory answer. Sales Objection Objections are never good reason for failing to complete the sale. An obstacle is real or unreal. .The salesperson’s presentation is now easy to construct. the next move is to present the solution to the prospect. the salesperson needs skill in accurate and rapid appraisal of people and their motivations. The salesperson should have clear ideas about specific abjections the prospect may raise and other obstacles to the sale that may be encountered. Adroitness in handling objection is a difference between effective and ineffective salespeople. Some obstacles can be circumvented. Sales resistance and sale closing Sales Resistance Prospects show sales resistance by pointing out real or imagined obstacles. but they nearly always divert the salesperson’s presentation from its main course. At best. If the obstacle is real. The salespersons ready to contact the prospect. the only tasks remaining are making an appoi8ntment. there are ways to circumvent it. an objection is sincere or insincere. deciding how to open the presentation.
so salespersons attempt to propel prospects into buying decisions. and salespersons leave empty handed unless they jolt these prospects into buying. and. Low pressure sales are closed more easily than are high pressure ones. no matter how insincere. . Often. Others say that insincere objections should be ignored. The best defensive strategy often is the strong counterattack. to get rid of them. to test their competence. sincere objections are overcome by patient and thorough explanations. not an objection).” there is no doubt that the product is the best solution to the prospect’s problems. the main thrust is to the prospects emotions. Prospects raise insincere objections to discourage salespersons. Some sales executives say that every objection. At closing time. But even after an excellent presentation. The skilled closer gives the extra push that triggers a buying response. Closing Sales The selling tactics followed affect the ease of closing the sale. or may react unfavorably to the salesperson’s personality. if this happens.Prospects may be confused in some respect. some prospects refrain from positive commitments. Prospecting. not that “a bill of goods is being sold. and primarily through rational processes of thought. and in spite of thorough prospecting. In high pressure sales. Except when personality conflict cannot be resolved (a real obstacle. prospects feel that they are reaching the buying decisions themselves. they seek to regain the offensive as soon as possible. The natural tendency of many people is to let inertia guide their reactions many are happy to leave things as they are. Occasionally even the best salesperson masterly upon closing skill to make the sale.” closing time provides an opportunity to register tangible proof of selling skill. puts the salesperson in the proper frame of mind for the close. and the salesperson should seek to regain the initiative as soon as he or she can gracefully do so. so there is no need for extra push just before the sales are consummated. When sales persons sense that an objection is insincere. and as false excuses for not buying. On low pressure sales. the salesperson needs unusually effective persuasion to close the sale. Every salesperson approaches certain closings with apprehension. either the salesperson sells the prospect an order or the prospect sells the salesperson on a “no sale. They do not permit an insincere objection to provoke an argument one of the surest ways to lose a sale. The salesperson feels that a real service is being performed for the prospect. if well done. the prospect regains normal perspective as the sale nears its climax. should be treated with the utmost courtesy.
the salesperson uses the direct approach.But failures to get an order result as much from poor prospecting and inept presentations as from ineffective closing. The salesperson may ask the prospect to state a preference from among a limited number of choice(as to models. emphasizing features that visibly impress the prospect. The salesperson first uses an indirect close. the issue is clearer. many people. the salesperson should normally try other. or the like). When an attempted close fails. Early closing attempt should be so expressed that a refusal will not cut off the presentation. that is.” Sometimes. and books on selling contain numerous examples. __ . do not buy unless the order is asked for outright. order size. Then the salesperson pauses for the prospect’s response. Or the salesperson may assume that the sale is made. the sale is made. The refusal does not necessarily imply an unwillingness to buy. Few prospects respond negatively to a frank request for the order in fact. “Go ahead and write the order. so phrasing the question that all possible responses are in the salesperson’s favor except for one: “none at all. Many indirect closes are in common use. Perhaps one last objection is voiced. the extra push may be a concession that makes the sale. Some executives recommend that sales personnel attempt as many as five closes before giving up. showing how the reasons for the purchase out weigh those opposed to it. write out the order.” Or the salesperson may summarize. and hand it to the prospect for approval if the prospect balks. which is expected to be. especially those who are themselves engaged in selling. it may indicate the prospect’s need for additional information or for clarification of some point. but after it is answered. delivery dates. surrendering gracefully when it is clear that no sale will be made. attempts to get the order without actually asking for it. A salesperson judges the sincerity of a prospect’s refusal. When open or more attempts at a indirect close fail.
such as regression analysis or econometric model building and simulation. others do not attempt to realize their total sales potentials because of limited financial resources. The sales forecast is a related but different estimate-it indicates how much a company with a given amount of resources can sell if it implements a particular marketing program. are quantitative estimates of the maximum possible sales opportunities present in particular market segments open to a specified company selling a good or service during a stated future period. If different methods produce roughly the same sales forecasts. as defined earlier. Others involve the application of sophisticated statistical techniques. Some methods are unsophisticated. They are derived from market potentials after analyses of historical market share relationship and adjustments for changes in companies” and competitors” selling strategies and practices. seek to maximize profitable sales and not possible sales. being mote profit oriented than sales oriented.CHAPTER 5 SALES FORECASTING Sale Forecasting and Sale Potential Sales potentials. A firm’s sales potential and its sales forecast are not usually identical-in most instances. There are several reasons for this: some companies do not have sufficient production capacity to capitalize on the full sales potential. The estimate for sales potential indicates how much a company could sell if it had all the necessary resources and desired to use them. Sales Forecasting Methods A sales forecasting method is a procedure for estimating how much of a given product (or product line) can be sold if a given marketing program is implemented. and still others. No sales forecasting method is foolproof-each is subject to some error. other firms have not yet developed distributive networks capable of reaching every potential customer. Two sales forecasting methods Amy be either sophisticated or unsophisticated. such as the jury of executive opinion or the poll of sales force opinion. Well-managed companies do not rely upon a single sales forecasting method but use several. the sales potential is larger than the sales forecast. then more confidence is placed in the . depending upon how they are used –the projection of past sales and the survey of customers” buying plans.
and a forecast made by this method is difficult to break down into estimates of probable sales by probable sales by products. Jury of Executive Opinion There are two steps in this method i. The jury of executive opinion method has weaknesses. High ranking executives estimate probable sales. All should support their estimates with factual material and explain their rationales. or when these figures have not yet been put into the form required for more sophisticated forecasting methods v. information available to some and not to other experts is disseminated to . The assumption is that the executives are well informed about the industry outlook and the company’s market position. iii. by markets.results. iv. by time intervals. capabilities.” The panel of experts responds to a sequence of questionnaires in which the responses to one questionnaire are used to produce the next questionnaire. This is a quick and easy way to turn out a forecast This is a way to pool the experience and judgment of well-informed people This may be the only feasible app [roach if the company is so young that it has not yet accumulated the experience to use other forecasting methods This method may be used when adequate sales and market statistics are missing. and An average estimate is calculated. This approach adds to the work load of key executives. then the sales situation merits further study. Companies using the jury of executive opinion method do so for one or more of four reasons: i. ii. Its findings are based primarily on opinion. But if different methods produce greatly different sales forecasts. requiring them to spend time that they would otherwise devote to their areas of main responsibility. ii. Thus. and so on The Delphi Technique Several years ago researchers at the Rand Corporation developed a technique for predicting the future that is called the Delphi technique this is a version of the jury of executive opinion method in which those giving opinions are selected for their “expertise. and marketing program. and factual evidence to support the forecast is often sketchy. by customers.
customers. often tagged “the grass-roots approach. Some contend that “this technique eliminates the bandwagon effect of majority opinion. they should have greater confidence in quotas based upon it. salespersons tend to be overly optimistic or overly pessimistic about sales prospect. implementing corrective actions is an endless task. To some extent. because sales personnel turnover is constantly gong on. . Furthermore. This approach appeals to practical sales managers because forecasting responsibility is assigned to those who producer the results. For most companies. Furthermore . if the “forecasts” of the sales staff are used in setting quotas. An other attractive features is that forecasts developed by this method are easy to break down according to products. The poll of sales force opinion serves best as a method of getting an alternative estimate for use as a check on a sales forecast obtained through some other approach. territories.all. In short. there is merit in utilizing the specialized knowledge of those in closest touch with market conditions. But the poll of sales force opinion approach has weaknesses. They are too near the trees to see the forest-they often are unaware of broad changes taking place in the economy and of trends in business conditions outside their own territories. Not generally trained to do forecasting. and by adjusting for consistent biases in individual salespersons” forecasts. middlemen. and influenced by current business conditions in their territories. as management thinks necessary.” Poll of Sales Force Opinion In the poll of sales force opinion method. by orienting them to factors influencing company sales. some sales personnel deliberately underestimate so that quotas are reached more easily. and new staff members (whose biases are unknown at the start) submit their forecasts along with those of veteran sales personnel with known biases. however. then individual forecasts are combined and modified.” individual sales personnel forecast sales for their territories. to Form the company sales forecast. Because the salespeople help to develop the forecast. enabling all to base their final forecasts on “all available” information. and sales force. this method is based to such a large extent on judgment that it is not appropriate for most companies to use is as the only forecasting method. the weaknesses of this method can be overcome through training the sales force in forecasting techniques.
if it is assumed that there will be the same percentage sales increase next year As this year. a statistical procedure for studying historical sales data.” Trend and cycle analysis helps in explaining why a trend. Only where sales patterns are clearly defined and relatively stable from year to year is time series analysis appropriately used for short term operating sales forecasts. when turns for the worst are called correctly. or to a moving average of the sales figures for several past years. cyclical changes. management can capitalize upon sales opportunities. once under way. Predictions on a year-to-year basis. next year’s sales are related to this year’s and to those of all preceding years. but predicting the turns often is more important. time series analysis finds practical application mainly in making long range forecast. such as are necessary for an operating sales forecast. the forecaster might utilize a naïve model projection such as this year’s sale Next year’s sales = this year’s sales * last year’s sales This year’s sales are inevitably related to last year’s. This procedure involves isolating and measuring four chief types of sales variation: long term trends. Time-series Analysis Not greatly different in principle from the simple projection of past sales is time series analysis. assumed values for each type of sales variation are inserted. seasonal variations. continues.Projection of Past Sales The projection of past sales method of sales forecasting takes a variety of forms. When turns for the better are called correctly. management can cut losses. The simplest is to set the sales forecast for the coming year at the same figure as the current year’s actual sales. or the forecast may be made by adding a set percentage to last year’s sales. Similarly. One drawback of time series analysis is that is is difficult to “call the turns. . for instance. Then a mathematical model describing the past behavior of the series is selected. and irregular fluctuations. and the sales forecast is “cranked out. generally are little more than approximations.” For most companies. Projecting present levels is simple and inexpensive for forecasting method and may be appropriate for companies in more or less stable or “mature” industries – it is rare in such industries for a company’s sales to vary more than 15 percent plus or minus from the preceding year.
some argue that it is defensible to predict sales by applying a certain percentage figure to “cumulative past sales of the product still in the hands of users” to determine annual replacement demand. in other words. The value leading to the smallest forecast error is then chosen for future smoothing. nor is it usual to correct for poor sales performance extending over previous periods. However. and the smoothing constant was (0. Evaluation of Past Sales Projection Methods The key limitation of all past sales projection methods of lies in the assumptions that past sales history is the sole factor influencing future sales. is a type of moving average that represents a weighted sum of all past numbered in a time series.00 if. for example. the sales forecast for this year was 350 units . exponential smoothing. consider this simple but widely used form of exponential smoothing a weighted average of this year’s sales is combined with the forecast of this year’s sales to arrive at the forecast for next year’s sales.Exponential Smoothing On e statistical technique for short range sales forecasting. most often the company whose product has achieved nearly 10 percent market saturation finds. The accuracy of the forecast arrived at through projecting past sales depends largely upon how close the company is to the market saturation point.a) (this year’s forecast) the a in the equation is called the “smoothing constant” and is set between 0.0 and1. . The forecasting equation. No allowance is made for significant changes made by the company in its marketing program or by its competitors in theirs. Nor is allowance made for sharp and rapid upswings or downturns in business activity. To illustrate. with the heaviest weight placed on the most recent data. that its prospective customers can postpone or accelerate their purchase to a considerable degree. If the market is nearly 100 percent saturated. If the series of sales data change slowly should be small to retain the effect of earlier observations. since most companies of this sort market durables or semi durables.7)(350) = 341 units of products Determining the value of a is the main problem.30)(320)+ (0. In practice is estimated by trying several values and making retrospective tests of the associated forecast error. actual sales for this year came to 320 units of product. is next year’s sales = a (this year’s sales) + (1. should be large so that the forecasts respond to these changes. If the series changes rapidly.
substantial nonsampling error is present. Survey results. Respondents do not always have well formulated buying plans.Past sales projection methods are most appropriately used for obtaining “check” forecasts against which forecasts secured through other means are compared. The main reason lies in the inherent assumptions that customer know what they are going to do and that buyers plans. Even though the survey of customer’s buying plans is generally an unsophisticated forecasting method. since it gathers opinions rather than measures actions. The availability of numerous computer programs for time series analysis and exponential smoothing has accelerated this practice. and to project the results to obtain a sales forecast. because it is easiest to use where the potential market consists of small numbers of customers and prospects. In such instance. and. it can be rather sophisticate that is. it is relatively inexpensive to survey a sample of customers and prospects to obtain their estimated requirements for the product. will not change. However. . Survey of Customer’s Buying Plans What more sensible way to forecast than to ask customers about their future buying plans industrial marketers use this approach more than consumer goods marketers. the manufacture sells direct to users. if it is a true survey (in the marketing research sense) and if the selection of respondents is by probability sampling. however. substantial sales are made to individual accounts. Few companies base forecasts exclusively on a survey of customer’s buying plans. most companies using this approach appear to pay little attention to the composition of sample and devote minimum effort to measuring sampling and non-sampling errors. Most companies make some use of past sales projection in their sales forecasting procedures. and customers are concentrated in a few geographical areas\ (all more typical of industrial than consumer marketing). even if they do. they are not always willing to relate them. once made. In practice. need tempering by management’s specialized knowledge and by contemplated changes in marketing programs.
as sales executives manage people who do personal selling. for formulating sales policies and personal selling strategies. for staffing it. Basically. and for putting together plans for their implementation. The sales executive’ job demands administrative skills much beyond those required of salespeople. the sales executive is responsible for setting personal selling goals. The sale executive is responsible for these and related control activities. Sales programs are put into effect through the sale organization. sales volume. and the sales executive is responsible for designing and shaping the sales organization. and the like. handling relationships with personnel in other company departments and with the trade (middlemen and /or customers). communicating and coordinating with other marketing executives. The operating functions include sales force management. for developing sales programs designed to achieve these goals. But personal selling experience and outstanding personal selling performance are two different things most companies can recount instances where an outstanding salesperson failed in a sales executive’s job. for developing the skills of those who are part of it. and reporting to some superior executive (such as the marketing vice president).CHAPTER-6 ORGANISATION OF SALES PERSONNEL Functions of the Sales Executive Many sales executives get promoted into their positions because of their previous performances as salespersons. outstanding sales persons have in inside track when sales executives jobs are being filled. The sales executive’s planning function includes those connected with the sale program. selling expenses. Achievement of sales departmental goals requires controls over selling activities. Personal selling experience is not unimportant. the sales executive has two sets of function: operating and planning. Nothing could be farther from the truth. In some companies. The relative emphasis that sales executives give to the . In addition. and for providing leadership to it. The assumption is that outstanding salespersons will be outstanding sales executives. The sales organization and its control. in some companies and fairly commonly in lower level sales executive sells some accounts personally (to keep a “hand in “ and to keep abreast of current selling problems and conditions).
Sales executives who have high caliber subordinates generally are more willing to delegate most of the performance of the operating functions to them and. The significance attached to operating and planning functions varies with the product. Whether or not the company provides them with a job description. he or she spends most of the time on operating function. sales executives attach the greatest importance to planning function: development of sales programs. Sales executives calculate what is entailed in their responsibilities. is the type of supervisory organization. As the size of the company increases. they . The amount of sales executive’s time devoted to planning and operating functions is influenced by size of the sales organization. Qualities of Effective Sales Executives What qualities should sales executives possess? It is difficult to list “success” qualification. sales executives attach the greatest importance to the operating function managing and directing the sales force. (2) the size of company. Nevertheless. markets. and building and maintaining relationships with dealers and customers. whatever their fields. and selling personal account. and marketing channels. making calls with salespeople. and (3) the type of supervisory organization.operating and planning functions varies with (1) the type of products. Sales executives in small companies spend less time on planning and more on operating. too. consequently. Customarily. Sales executive’s jobs cover a gamut of products. if any. the sales executive devotes more time to planning and less to operating. sales executives at all organizational levels devote more time and attention to sales force management than they do to any other single activity. Ability to define the position’s exact functions and duties in relation to the goals the company should expect to attain. in general. spend more time on planning and less on operating than do their counterparts in industrial goods companies. qualifications in common. If the product is an industrial good. Consumer goods sales mangers. Exerting important influences on the way sales executives distribute their time and effort. When the sales executive supervises the field sales force through subordinate sales executives. and there would seem to be few. have time left for planning. coordination of personal selling with advertisings. five qualities (or abilities) common to effective sales executives. can be identified: i. When the sales executive supervises the field sales force directly. more attention is devote to planning and less to operating. If the product is a consumer good.
The time of sales executives is valuable. wider policy limits can be and the more the superior’s time is freed for planning. they retreat to shangro las where surroundings are conductive to thinking and planning. they depend far move on careful study of motivational factors and shrewd analysis of the ever changing patterns of unsatisfied needs among those with whom they work. . recreation. Ability to allocate sufficient time for thinking and planning. Ability to exercise skilled leadership. Ability to utilize time efficiently. Within existing policy limits. Ability to select and train capable subordinates and willingness to delegate sufficient authority to enable them to carry out assigned task with minimum supervision. They recognize that reviewing past performances is a prerequisite to planning. iii. They strive to gain new insight that will bring problems into better focus. Skilled leadership is important in dealing with subordinates and with everyone else.draw up their own descriptions consistent with the responsibilities assigned by higher management. ii. Able administrators make their contributions through thinking and planning. when an exception falling outside these limits occurs. Competent sales executives develop and improve their skills in dealing with people although they rely to a certain extent on an intuitive grasp of leadership skills. They arrive at an optimum division between office work and field supervision. iv. They know how and are willing to think. Effective sales executives shield themselves from routine tasks and interruptions. Revision is necessary whenever changes occur in the assigned responsibilities or in company goals. Effective executives select high caliber subordinates and provide them with authority to make decisions. Excessive work time and too little leisure reduce efficiency. Ability to delegate authority is must. The more capable the subordinates. Successful sales executive balance such leisure time activities as community service and professional meeting against personal social activities. They allocate working time to tasks yielding the greatest return. Failing this. and they budget it and use it carefully. the superior decides. and self improvement. v. decision are made by subordinates. Even the use of off duty hours is important.
it means that too much is being staked on one individual. for the company. Effective sale executives are highly qualified as problem solvers and decision makers. Promotions come to those prepared for them. Effective sales executives plan and implement their own self development own foals with those of the organization. Indispensable is undesirable for both the executive and the company. Sometimes. not only must they know where they are going. Sales executives should want to get ahead. Effective sales executives accept responsibility for all activities related to their positions. however. But type management must be kept abreast of their progress. Junior sales executives are well advised to learn and master the duties and responsibilities of the positions immediately above theirs. for personal goals are as vital to them as the objectives they set for the sales department. Whenever the sales executive and the company cease to move toward mutually compatible goals. it means blocking opportunities for promotion. sales executives unilaterally reconcile such goal conflicts (usually by adjusting personal goals to fit those of the organization). but they avoid becoming indispensable. and effective sales executives place high priority on training their own replacements. Effective . Competent sales executives do not require a close watch over their activities. For the sales executive. are preparation consist of setting definite career goals and adhering to programs of continuing self development. depends largely upon relations with top management.Relation with Top Management Effective sales executives are well above average in initiative and personal drive realizing the sales executive’s potential. either the two sets of goals must be reconciled. Consequently. sales executives guard against taking too many of their pr4oblems to top management. One way to avoid becoming indispensable is to practice and advocate delegation of authority. Asking for help in deciding problems is asking for closer supervision (and less authority). or the executive should leave the firm. More often. but if they are to achieve these goals. they reconcile them through interaction with company top management. friction causes both to fall short. this being important for maximum progress of individual and company alike. When this happens.
and the amount of time allocated to them. never missing scheduled engagements without reason. When the facts do not speak for themselves when those ion authority fail to grasp their full significance the sales executive. They may also have a role in achieving control over these activities and coordination among them. they also are concerned with other marketing activities. changed or improved. vary with the particular job. Other decision is made on adding new products and on changes on product designed and other features. and top management is unconvinced. pricing. Their reports ensure that top management known in broad outline the problems encountered in selling the company’s product. and distribution. services rendered in connection with sales. but sales executives are almost always concerned with products. They keep dated record of important conversations. the ways they are handled. Effective sales executives pay attention to the manner in which they communicate with top management. Effective sales executives listen and learn. and special reports when appropriate. is absolutely sure of it. and the results accomplished. and packaging. they are willing to modify preconceived ideas. They exercise restraint in reporting their own activities. They transmit all ordinary repots promptly. Decisions are made on whether each should be retained. but they see that their superiors have all the information needed to evaluate their personal effectiveness. . The degree of responsibility over these activities. should bring to bear his or her full powers of persuasion. Sales executives following such rules of conduct experience little difficult in winning top management’s confidence and respect. Relation with Product Management Product planning and the formulatio0n of product policies require numerous decisions. promotion. They don not hesitate to give their superiors the benefit of their thinking. unless matters of high principle are involved. Still their decisions concern product quality. Periodically each product needs appraising in terms of its profitability and its ability to fulfill buyer wants. or dropped from the line.sales executives keep top management informed on important decisions and the department’s plans and accomplishments. but. When the sale executive has a great idea. the sale executive must play the role of super salesmen’s and “sell to those with the authority to decide. They refrain from voluntarily discussing the personal their executive contact. like any competent executive. Relations with Managers Other Marketing Activities Sales executives spend most of their time on sale force management.
Personal selling’s effectiveness traces to the use of personal contact in conveying the sales message to prospective buyers. Sales executives provide inputs for these decisions. Besides serving as an important source of information. Sales personnel are responsible not only for transmitting sales messages to prospects but for securing the use of point of purchase displays and for coordinating dealer efforts with advertising programs. But personal selling is the most expensive promotional method in terms of cost per sales message transmitted. Almost every product relies on personal selling as a promotional method at one or more points in the marketing channel. Their knowledge of the market and their control over personal selling activity make sales executives a key source of information.Product decisions are often the shared responsibility or marketing. . Relations with Promotion Management Chief marketing executives are responsible for setting promotional policies. The sales executive makes certain that salespeople keep abreast of current advertising campaigns. their needs. Their contact with market through subordinates and sales personnel provide them with feedback about product performance and acceptance generally not available from other sources. behavior. Sales executives play similar roles with respect to other promotional methods. operating as a product committee. and motives. Advertising personnel need access to the sales executive. research and development. and it is the sales executive’s responsibility to keep selling costs down. and they occupy a strategic position ion implementing promotional plans. The proportion of personal selling in the promotional mi9xgenerally must be limited. Decisions regarding the usage of these methods in the promotional mix are normally made by the chief marketing executive or by other specialists. Sales personnel need briefing on specific advertising appeals. The sales force should know which media are scheduled to carry advertisements for which products and the timing of each ad’s appearance. and financial executives. production. because of their key roles in making and implementing promotional policies. enabling them to adapt their selling approaches in ways that enhance the total promotional impact. Sales executives. since this executive is an important source of information about customers. but sales executives participate in their formulation. must coordinate closely with other executives in the formulation and implementation of the promotional program.
Selection of a marketing channel. cost accounting. both geographically and as to the classes of customers. advertising. price policies should be formulated and prices should be set by a group of executives. because the sales department has the closest relationship with the market. It is also necessary to determine the number of outlets for the product at each distribution level. Once pricing policy is established. for pricing policy making is. both the chief marketing executive and the sales executive occupy influential positions in top management councils. and public relations. but the sales executive is the one responsible for information distributors and dealers and obtaining their conformance. Responsibility for administering prices should be assigned to the sales executive. the sales executive. For example. legal. Relations with Distribution Management Distribution policies are major determinants of the breadth and complexity of the sales department’s organization and function. its implementation is the responsibility of the sales executive. Relations with Pricing Management When major decisions on pricing policy are required. In spite of the fact that these two executives are well qualified to speak with authority on pricing matters. or channels. because of close and continuing contacts with the market and the marketing executive because of access to pricing information gathered and interpreted by the marketing research staff. Include in the policymaking group should be representative not only of the marketing department but also of such departments as production. and this affects the size and nature of the manufacturer’s sales organization and the scope of its activities. an interdepartmental activity. the pricing committee might adopt suggested list prices. Pricing policies should result from the cooperative action of the group rather than from compromises among its members. by nature. sets the pattern for sales force operation. Furthermore. to other executives. Relative. Each department affected should be represented. credit.the sales executive secures coordinative efforts by the sales force to ensure that each promotional activity obtains optimum results. they generally have much clearer ideas of the prices final buyers are willing to pay. marketing .
it must attain the quantitative personal –selling objectives not only sales volume but other objectives related to “profit”(such as keeping selling expenses within certain limits) and to “competitive position”(such as attaining given market shares). When setting up business. Implicit in the concept of a sales organization is formal relations to one another. A sales organization is both an orienting point for cooperative endeavor and a structure of human relationships. Over the long haul. The Sales Organization Effective sales executives insist upon sound organization. Existence of a sales organization implies the existence of patterns of relationship among subgroups and individuals established for purposes of facilitating accomplishment of the group’s aims. since they are responsible for Implementation of these policies. and bearing informal and formal relations to one another.” but the sales organization makes its major contribution in the present and the near term-recognizing this. management is more concerned with financing . They recognize that the sales organization must achieve both qualitative and quantitative personal selling objectives. sale executives play key roles in providing information needed for their formulation. implicit in the concept of a sales organization is the notion that individual members cooperate to attain ends. the effective sales executive builds both sales-minded less and profitmindedness into the sales organization. the need for sales supervision. In the short run. and the like. the nature of the salesperson’s job. It is group of individuals striving jointly to reach qualitative and quantitative objectives.management determines policies on the amount and extent of cooperation of it desires with members of the distributive network also influencing the size of the sales force. Organization defects often trace to lack of attention given to sale organization during the early existence of a company.achieving short-run quantitative personal selling objectives precedes attainment of the longrun qualitative personal selling objectives. it must achieve qualitative objectives those concerning personal selling’s expected contributions to achievement of overall company objectives. Because of the impact of distribution policies upon the sales organization and its activities. The sales organization is not an end in itself but rather the vehicle by which individuals achieve given ends. The effective sales executive looks upon the sales organization both with respect to “here and now” and to the “future.
like a well –designed automobile. after all. the skilled manager moves both individuals and informal groups along lines that facilitate achievement of the purposes of formal organization. The sales organization.and non-marketing problems. go exclusively to question of design. of the ‘formal” organization plan . but most often these relate to no marketing activities. how an organization works is more important than how is is supposed to function. indeed should not . friction would be minimized. despite. Similar alterations in the sales organization are frequently neglected or postponed. for example.dynamic characteristics inherent in marketing preclude the achievement of such perfection. particularly when . the manufacturing organization is adapted to changed situations. Purposes of Sale Organization In the ideally organized sales department. accomplishes more. as products are improved. The sales organization should be adjusted to fit-ideally. for example. To Permit the Development of Specialists As a business expands. new products added. But when sufficient attention is given to sales organization. and in other business factors calls for changes in the sales organization. It is difficult to fix responsibility for performance of all necessary activities. Executive effort expended on sales organization need not. if not attained. production quantities increased. The ideal sales organization has a built in adaptability allowing it to respond appropriately in fluid and diverse marketing environments. A well designed sales organization. in competition. Shifts in marketing. Sales management should direct its main organizational efforts toward the “informal” organization. marketing and selling activities multiply and become increasingly complex. The basic setup designed when the company was new remains. Through intelligent leadership and related “human relations” talents. and personal selling efforts increase in productivity. changes in selling style and size of sales force. wasted motion and duplication of effort would be eliminated. is the vehicle through which personal-selling strategy is implemented. that is. the ideal is approached. Executives of new enterprises consider organization. and cooperation maximized . and production processes developed. to anticipate changing situations. In manufacturing. Her organizations in many companies evolve without regard for changing conditions. than does one that is an arti-fact. and more economically.
responsibility for maintaining them should be assigned to an executive specializing in customer relations. When a company is small. or division of labor as economists call it. To assure that All Necessary Activities are performed As a sales organization grows and specialization increases. . total accomplishments of the organization are less than they could have been if. they are broken down into manageable units and are assignments to specialized personnel. Their personalities may be such that through assumption of authority.” This is conductive to development of specialists. One purpose of reorganizing the sales department is to facilitate assignment of responsibility and delegation of authority. grater advantage had been taken of the synergistic effect when the sum of combination effort exceeds the efforts of the same individuals working alone. an individual should be assigned responsibility for maintaining such relationships. simply because they are not assigned to specific individuals. As soon as executives begin to lose their informal contacts with customers. Individuals vary in competence. occasionally. This involves fixing responsibility for specific tasks with specific individuals (or.executives are reluctant to delegate authority. and effectiveness. top executives become farther and farther removed from the customers. so to speak. If these contacts are highly important. As a company grows. it is increasingly important to perform all necessary activities. This often requires reshaping the structure so that it is easier for specialists to develop. Particularly forceful executives may prevent a basically sound organization from functioning smoothly. for instance. as marketing channels lengthen. What are “necessary” changes over time when jobs are highly specialized. Essential tasks may not be performed. specializations. its executives are in close contact with users of the product. danger exists that the organizational plan will not provide for supervision of all activities. As tasks grow in number and complexity. The assignments made are called “delegation of authority. To Achieve Coordination or Balance Good organization achieves coordination or balance. Or both. and as the marketing area expands geographically. with certain group). Worseyet. their positions are magnified out of all proportion to their importance. By getting people to pull together as a team rather than as an assortment of individuals. the organization accomplishes more collectively than its members could independently. are the chief means through which the processes of organization and reorganization are effected. In fact. failure to delegate it. potential.
This. to enforce their directives within a specific and limited field. Functional executives are specialist’s experts in some aspect of the business who assist executives holding general line authority. freely communicating face to face group to decrease the possibility of uncoordinated proliferation. To Define Authority Sales executives should know whether their authority is line. When. Line authority carries the power to require execution of orders by those lower in the organizational hierarchy. Line executives make decisions on the need. supervision and guidance. staff executives attempt to exercise line authority. and two way communication. mainly on routing technical problems. directions for . organizational goals. otherwise. directly to lower organizational levels. in turn. may get instructions on merchandising the advertising from an advertising specialist. One form of justification is to devise technical nomenclatures that no specialists in other areas have difficulty understanding. These instances of uncoordinated proliferation suggest that top sales executives should concern themselves continually with orchestration of effort. Staff authority is the power to suggest to that holding line authority the method for implementation of an order. management must guard against a tendency of each to search for ways to justify his or her own existence. Staff executives advise line executives about methods but have no formal power to require or enforce the execution of their recommendations. Functional authority enables specialists in particular areas. some of the means for accomplishing this are indoctrination and training programs. leads to increasing communication difficulties with other specialists and a reduction in overall organizational effectiveness. Throughout the sales organization different activities are kept in proper relation to one another in order that the greatest organizational effectiveness is realized. such as in technical product service. for instance. such specialists advise on new product introduction. A salesperson.Motivating individuals to work together toward common objectives is. or functional. important in achieving coordination. group meetings. then. Individual goals are subordinated to or reconciled with. friction develops. They do this by issuing orders. As specialists emerge in a growing sales organization. For example. they are headed for trouble with the line executives whose authority is usurped. place. A sales organization receives directions from several sources. and time of action over a wide range of matters. Modern organizational theory suggests that sales departments should be divided into small. for instance. All executives should understand the nature of their authority with respect to each aspect of the operation. staff.
Top sales executives need not concern themselves personally with all the sales department’s problems and activities. while higher executives devote less time to operations and more to planning. Modern organizational theory points out . when they have capable and well trained subordinates. the larger the number that can be effectively coordinated. to coordinating their efforts. has said: no person should have more than one boss. To Economize on Executive Time As a sales department’s operations and activities increase in complexity and number. One must consider not only relative abilities of the coordinator and the subordinates. then of organization and one often overlooked is achieving economies in the use of executive time. then. This limit is the “span of control. Furthermore. It also allows for the more effective use of specialization. have a wider span of control than higher executives devoting much time to planning and policy formulation and little to administrative and operating details. subordinates may not work in harmony or discharge assignments in line with expectations. and probably more time. These conflicts with traditional organizational theory. additional subordinates are added. In building the sales organization. however. if individuals receive instructions from multiple sources. the need for effective coordination limits the number of subordinates who report directly to certain executives. Lower level sales executive. but the “one boss” rule does not necessarily follow. but the nature and importance of the coordinator’s other duties.” It is not possible to specify the proper number of subordinates. in general. those with salespeople reporting directly to them. However. But the greater the abilities of coordinator and of those reporting to him or her. One purpose. as sales executives gain subordinates. and rightly so. This permits higher ranking sales executives to delegate more authority. A smoothly operating sales organization has built on way of achieving harmony. in deciding optimum span of control for a . The supporting argument is that. particularly routine or technical ones. The argument is a good one. which. that the real problem is on e not of avoiding the multiple boss situation but harmonizing orders and directives from different sources. Two important ways are continuing coordination of the work of different executives and free flowing communications system. Unless the executive is an effective coordinator. they may get conflicting and confusing directing directions.administering a questionnaire to customers from the district sales manager. they must devote more attention.
and reliability of the communications system. The span of control is widened: (1) with improvements in efficiency.(2) when subordinates perform routine. speed.particular position. similar. or repetitive tasks. and (3) when subordinates are concentrated at the same location as the executive. other factors are taken into account. .
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