CHAPTER 13 SALES-FORCE MANAGMENT CHAPTER OBJECTIVES 1.

To consider the role of selling in modern organizations, whether it is selling to consumers, to resellers, or to businesses. 2. To identify the tasks that sales people must fulfil. 3. To consider how a firm can identify the best salespeople. 4. To recommend ways of managing and motivating a sales force. 5. To consider appropriate compensation plans and the setting of quotas for salespeople. 6. To discuss how to set up a sales organization and the best way to design sales territories. CHAPTER SUMMARY The chapter begins by looking at the role of salespeople in the organization. It then goes on to look at issues such as the art of selling, and how the selling effort can be managed. It investigates sales force management, organization and territory design. It concludes by looking at the future of selling. Point 1 - Introduction. Although selling is an extremely important function in most organizations it does have something of a bad reputation. This has mainly come about from the kind of hard selling associated with door-to-door selling. This image is quite far removed from the majority of selling that takes place especially in the business-to-business sector. Much of a salespersons time is not actually taken up by selling but with a variety of other tasks that they have to undertake in order to achieve the sale. Point 2 - Selling to customers.

There are, in essence, two key concepts of selling: adaptive versus standardized selling techniques and soft versus hard selling. Managing the sales effort concerns the allocation of time or calls, the focus to be given to old versus new accounts and tour planning. All this has been aided by the use of computer-aided selling (CAS). Point 3 - Managing the sales force. Managing the sales force itself involves a number of key areas including, performance measurement, selection and training of salespeople, and motivational methods. Point 4 - Organizing the sales force. Sales force orgainization refers to the type and size of the sales force. The type determines the degree of controllability while the size has profit implications. If the sales force is large the organization has to decide about the kind of specialization and co-ordination to use. Point 5 The future. The future of selling will be determined by technological advancements in electronic media and telecommunications which will have a direct impact on an organizations ability to access more customers in a shorter amount of time, therefore, such aspects as selling time allocation, tour planning, and territory design will lose importance. Point 6 - Conclusion. Sales-force management involves three different tasks. Firstly, methods for selling and managing a sales territory. There are no prescriptive methods for doing this and, if anything, an adaptive approach to selling is probably best. Secondly, supervision by management which should include valid performance measurement and suitable motivational methods. The third task in concerned with the setting up of a sales force in terms of its organization. Key changes in the future are likely to be concerned with technological advancements and information handling. Answers to the discussion questions:-

1. Students are required to analyse the advantages and disadvantages of each of the communication methods specified. Personal selling, for example has the advantage of being one-to-one with the customer but there is far less control over the message than with say, advertising. 2. This is because profit may not be proportional to sales. It is also not an indication of the call effort required and the accessibility of their location has to be taken into account. 3. Different territories will have different opportunities in terms of increased business which will not bear any relation to the current level of sales, e.g. a territory that currently has a low sales volume may provide plenty of opportunity to increase sales with new and existing customers. (See Box 13.2 pp300) 4. The answer to this lies in using a number of selection and training methods and then evaluating them. This evaluation can be carried out in a number of ways, see Section 3.2 pp300. 5. This should promote discussion of the advantages and disadvantages of various compensation plans. With the use of commission some of the selling risk is passed to the sales person, whereas with a fixed salary the company takes all the risk. 6. Bonuses can be used to repair mechanism for problems with commission as commission is only paid for the achievement of sales or profit and ignores, for example, achievement of other selling related tasks. 7. It may become unprofitable to offer commission rates if the cost of obtaining higher sales levels becomes unprofitable. 8. Here the benefits of sales quotas can be discussed in that they set specific targets which can be used for performance measurement and they can also reflect different conditions that may exist in territories. 9. The answer to this lies in the various advantages and disadvantages of sales force organization as covered in Section 4 pp309. One of the key issues is the nature of the product. 10. It would probably make sense to use one sales force as the product is fairly similar and the customer may be interested in more than one insurance policy and may not wish to deal with a number of different reps. 11. The answer to this lies in the fact that sales territories differ in their sales potential and the conditions for its realization. There are a number of exogenous factors that will affect territory potential.

Suggested activities: 1. For an organization of your choice, write a report that critically examines their motivational plan. 2. Taking the pie-chart in Figure 13.1, in groups, suggested how the actual selling time of representatives could be increased by the use of technology. MINI CASE LITTLE COWARD! Discussion questions: 1. Any new commission system would have to be seen as fair and equitable by the sales force and they would also have to have the opportunity of earning at least the same level of pay as before, if not more. An analysis of the new commission rates shows this to be the case. It also overcomes the disadvantages of the old system.
/THER MOTIVATIONAL METHODS COULD BE REVIEWED BUT ANY APPROACH HAS TO GET ROUND THE FACT THAT REPS DO NOT LIKE CALLING ON THE )"2 S