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Mba IV Sales Management (14mbamm407) Notes
Mba IV Sales Management (14mbamm407) Notes
Contents
Module 1: (8 hours)
Introduction to sales management: Meaning, Evaluation, Importance, Personal Selling,
Emerging Trends in Sales Management, elementary study of sales organizations, qualities and
responsibilities of sales manager. Types of sales organizations.
Selling Techniques
The techniques of modern sales management and selling techniques were refined by John Henry
Patterson, widely known as the father of modern sales management. He ran the National Cash
Registry.
He asked his best sales people to demonstrate their sales techniques to other salespeople. The
best sales approach was printed in a sales primer and distributed to all the other sales people to
follow
on products, compare suppliers prices and place orders on the internet in a matter of
seconds. They can access online a great amount of information about almost anything.
Marketing organizations also have a new set of capabilities. Companies can collect more
information about capabilities. Companies can collect more information about markets,
customer, prospects and competitors by using the internet. They can establish website and
communicate information about the company, its products and services to the needs of
individual customers.
To compete effectively, salespeople and sales managers will have to adopt to the latest
technology.
Some of the technological innovations for sales management are portable and desktop
computers, mobile phones, video conferencing and videotape presentations. Technology
can make some sales activity efficient and cost effective.
Customer Relationship management
Combining relationship marketing with information technology has resulted in customer
relationship management or customer relationship marketing. Interestingly, the concept
of relationship marketing came about earlier by bringing quality, customer service, and
marketing together.
Relationship marketing aims at build long term, mutually satisfying relations with key
parties customers, distributors and suppliers in order to retain their long term preference
and business. CRM enables companies to provide excellent real time customer service by
focusing on meeting the individual needs of each valued customer by the use of CRM
software packages.
Salesforce diversity
The demographic characteristics of the salesforce are changing and are becoming more
varied. For example, more women are taking up careers in selling and sales management.
In addition, today salespeople are more educated, with college degree and some of them
holding postgraduate degrees. Sales manager will have to manage a salesforce consisting
of women, more educated and less educated salesperson, as well as senior people. The
needs or expectations of the varied salesforce will be different and consequently the
motivational tools will not be the same.
Team Selling Approach
The practice of team selling is widely followed by most companies in recent years. Team
selling approach is used when a company wants to build a long term mutually beneficial
relationship with major customer, who have high sales and profit potential. It is also used
for selling a technically complex product or service to a prospective customer. The
composition of the team includes members from top management, technical specialist,
customer service, inside salesperson and salesperson or manufacturers representative.
Team selling requires the joint selling effort of several persons, and hence, designing an
effective compensation plan can be a challenging task.
Managing multi-channels
Multi-channel marketing system occurs when an organization uses two or more
marketing channels to reach one or more customer segments. Major benefits of a multi-
channel marketing system are:
Lower channel cost (ex: selling by phone instead of visits by salesperson to small sales
potential customer)
Increased market coverage.
Customized selling-selling technically complex products and services by the companys
technical salesforce.
Multi channels may also lead to conflict and control problems as two or more channels
may compete for the same customer. The successful sales manager will have to
effectively manage the conflicts between channel members by using various techniques
like co-operation, exchanging person, mediation.
Ethical and Social Issues
Sales managers have social and ethical responsibilities. Sales people face ethical issues
such as bribery, misleading, and high-pressure sales tactics. Giving payment or gift to get
an order, misleading the customer by exaggerating the benefits of a product and using
high-pressure tactics of committing wrong delivery schedules to a customer needing
urgent delivery of a raw material are example of unethical behavior of salesperson.
Today sales manager have no choice but to ensure ethical standards from the salesforce
otherwise they may be out of business or even land up in legal problems.
Sales Professionalism
Todays top sales people are largely made, not merely born. Selling has increased in
complexity, because composition is more intense, customers are more sophisticated and
products and services have become more technical. Success mostly comes to those
salesperson who have a combination of natural ability and acquired skills. A study on
what do buyers like most in a salesperson indicated qualities like reliability, credibility,
professionalism, integrity and product knowledge as most valued. The knowledge, skills
and the right attitudes to meet complex and competitive market conditions of today are
required by the professional salesperson through intensive training and practice. Some of
the successful organizations have their own centers for training and management
development. Todays companies spend a lot of money each year to train salespeople in
the art of selling and to make them professional.
Elementary study of Sales Organization
A sales organization is an organization of individual either working together for the marketing of
products and services, manufactured by an enterprise or for products that are procured by the
firm for the purpose of reselling.
A sales organization defines the duties, roles and the rights and responsibilities of sales people
engaged in selling activities meant for the effective execution of the sales function.
Factors influencing structure
Product and service related factors
Organization related factors
Marketing mix related factors
External factors
Organizational principles
A sales manager needs to understand the various organizational principles that help in the
smooth functioning of the organization, supports the work of the team and helps the team to
respond to market opportunities.
Span of control
Number of subordinate and sales staff under the supervisor of a sales Manager is known as span
of control. When new recruits have to be handled Narrow span of control can be used or else
wider span of control is preferred.
Centralization and Decentralization
The extent of control authority of the top management decides the level of centralization. Highly
centralized organization-Every decision will be made by the top management. Decentralization
helps organization to be competitive at the respective market level.
Integration and co-ordination
The organization across departments integrated to serve customer with effective co-ordination.
Types of sales Organization
Line sales organization
It is the simplest sales organization structure. All managers, from top sales manager to middle
level managers, have line authority. Line authority means people in management positions have
formal authority to direct and control immediate subordinate. Line managers are responsible to
achieve target.
Head marketing
Sales Manager
Area sales manager 1 Area sales manager 2 Area sales manager 3 Area sales manager 4
Salespeople Salespeople Salespeople Salespeople
Line and Staff organization
In this type of organization structure, a group of specialists are made available to the top sales or
marketing executive. These specialists, called staff are experts in certain support activities such
as marketing research, sales training, and advertising or integrated marketing research, sales
training, and advertising or integrated marketing communication and marketing logistics. Staff
manager dont have any authority to issue directives to salespeople, who report to line sales
managers.
Head marketing
Marketing service manager sales manager Marketing research manager Promotional manager
Area sales manager-1 Area sales manager-2 Area sales manager-3 Area sales manager-4
Sales People Sales People Sales People Sales People
Functional sales organization
In this sales organization, the principle of specialization is fully used. Each staff specialist
manager, such as marketing research manager and promotion manager, has line authority of
his/her function over salespeople. Example, marketing research manager can sales manager can
directly issue instructions to all salespeople through area sales managers to obtain certain market
information.
Head Marketing
Marketing service Manager sales manager marketing research manager promotional manager
Area sales manager
Salespeople
Horizontal Organization
This organization structure removes management levels (hierarchy) and also departmental
boundaries.
The support functions like strategic planning, human resource, and finance are looked after b a
small team of senior executives. All other people in the organization are the members of cross
functional teams, which perform many core processes like product design, sales and production
or operation. These teams also work with customer teams to solve the customers problems.
Advantages are reduction in supervision, unnecessary tasks and costs and substantial
improvement in efficiency and customer responses with enthusiasm.
Research design team operation team
Customer research production
Product /service design quality assurance
Systems engineering
Planning team
Strategic Planning
Accounts, Finance
Human Resource
Chief operation officer
Customer support team customer satisfaction
Service sales and marketing
Training pricing, promotion
Information channels, logistics
Qualities and Responsibilities of sales manager
Qualities
He should be good communicator, catalyst, and planner
Module 2: (6 hours)
Selling skills & Selling strategies: Selling and business Styles, selling skills, situations, selling
process, sales presentation, Handling customer objections, Follow-u action.
In the theory of diffusion, the innovators do not give much importance to the salesperson and
make new purchases out of a habit of experimenting.
People oriented
Problem oriented
Sales technique oriented
Push the product oriented
Take it or leave it
Selling Situations
A typically selling situation explains what kind of customers a salesperson is going to face and
what kind of customers a salesperson is going to face and what kind of sales approach will help
him in closing a sale in that situation.
The sales Task and Function
The salesperson has to undertake various tasks during the process of selling. We have classified
the different kinds of salespeople in the introductory on the basis of sales responsibility and
functions.
When a salesperson gives a sales presentation or makes a sales call he communicates with the
customer and basically performs the communication function. But the customer may have
queries, doubts and he wishes the salesperson is involved in listening function.
By providing information about other existing products of the company and new products that
are likely to come to the market, a salesperson also performs the information dissemination
function.
In non standardized markets, where there is no list price involved in buying and selling, the
salesperson needs to negotiate with customers and bargain wherever possible for the benefit of
the
organization and thus he is involved in the negotiations and bargaining function.
Maintenance Selling
Typically, maintenance selling involves the art of servicing the existing accounts, securing
promotional cooperation, counting inventory and taking replenishment orders, and delivering the
products. In the advertising world, these kinds of salespeople are called client servicing
executives who provide service to clients and also take the orders as and when required. There is
no question of prospecting for this kind of salespeople as it is done with the exiting customers. In
the IT sector, these sales people are posted at the client site and are responsible for solving the
clients problems. In high tech product categories also we find service and maintenance
salespeople.
Developmental selling
Salespeople engaged in developmental selling are called business developmental sales executives
as they try to contact the potential customers and build business for the firm. They are the real
salespeople who try to do prospecting from the leads either available in the organization or
collected by them and then take the prospect through the whole process of selling to realize a
sale.
Selling skills
While it is very difficult to find out a set of characteristics for guaranteed success in selling, hard
work, working smartly in business, ability to set goals, level of maturity, communicative ability,
honesty, integrity, can make a successful salesperson. In some situations these skills can be
developed through training and practice. Selling skills are a set of characteristics that are
necessary for a salesperson to posses, failing which he may not be successful in selling.
The essential skills for successful selling are
Problem solving skills Communication Skills
Selling Skills
Negotiation Skills Listening Skills
Conflict Management
Communication Skills
The ability and expertise to communicate is necessary in selling function. The salespeople should
posses a good vocabulary and express themselves intelligently to the customer. The later element
is necessary mostly in intelligent buying and selling situations, such as business to business
selling.
Research has found out that trust between a buyer and a seller largely depends on five elements
in the salespersons behavior.
1. Truth of words communicated by the salesperson
2. Predictability of action
3. Competency ( ability/knowledge/resource)
4. Intent or empathy (placing the customers interest on par with the sellers interest, a
commitment to solving the customers problem and responsive to the customers cause)
5. Likeability (It is an emotional issue and difficult to clearly define, but can be understood as a
perception of commonality by both the parties.
Communication Process
Communication is the exchange of idea and information between two parties. The
communication process is defined as a set of activities and systems integrated for an exchange of
ideas, concepts, information and knowledge between a sender and a receiver.
Sales communication can be both personal and non-personal. Non-personal communication
means the use of mass media for providing product information to the consumers. Non-personal
communication involves newspaper, TV, and other mass media through which sponsor sends
messages about the products and services without a scope of knowing the recipients.
A typical communication process begins with a source, which in this case is the salesperson
himself, who provides the relevant product and service information. The source has thoughts and
ideas to communicate to the audience, which have to be encoded in a presentable form by the
sender. Sales presentation, sales literature sent through direct mail, telephone calls and selling
information over the internet are example of communication and information dissemination in
the selling process. For this purpose, the message has to be encoded into a presentable format
that can be transmitted to the customers.
This involves translating ideas and thoughts into symbols, words and pictures to meaningful
communication patterns. The words and symbols used by the source should communicate the
same meaning to the receiver.
Managing body language
Salespeople can take care of their verbal and non-verbal communication while making sales
presentations. The following will explain the strategy and tactics they should follow to manage
body language to show that they are confident enough to handle a sales situation.
Personal appearance
Posture
Gestures
Facial expression
Eye contact
Space distancing
Listening skills
The sales manager has to be a very good listener and use his listening skills to lead towards sales
realization. Poor listening skills may make a sales manager miss subtle issues in customer
interaction and- this may lead to non-resolution of customers problems and thus a poor level of
sales realization.
Research suggest that people are only 25% efficient in their ability to listen. An average person
remembers only about half of what is being told to him after 10 min and forgets half of that
within 48hrs.
Process of listening
Attendance Evaluations
Interpretation Response action
Remembrance
Levels of Listening
Feedback
Paraphrasing
Clarifications
Empathetic listening
Active listening
Conflict Management Skills
Conflict exists in every organization. Conflict in sales organization is more evident than in any
other organization. This is due to the fact that there is always conflict of interest among people at
different levels as the goals are different at each level of the organization.
Models of conflict
Approach approach
Approach-Avoidance
Avoidance-Avoidance
Components of conflict
Interest
Emotional
Value
Limited authority
Deadline
Get lost/stall for time
Take it or leave it
Problem solving skills
The sales person needs problem solving skills for effective selling. The rational and consultative
selling approach suggests that a salesperson should not be a mere order taker; he should rather
act as a problem solver and a consultant to the customer. These roles are more significant for
high-tech selling and business-to-business selling.
A true solver will analyze the situation and extract the real problem from an ocean of information
and facts.
Problem solving Process
Define the problem
Generate alternative solutions
Decide the solution
Implement the solution
Evaluate the solution
Selling Process
Pre-sale preparation
Prospecting
Pre-approach before the interview
Approach to the customer
Sales presentation
Handling customer objections
Sales presentation
Sales presentation
There is need for two way communication between the salesperson and the prospect during a
sales presentation. Here, the salesperson presents his products and services before the prospect
and makes effort to create and modify their interest into sales realization for the company. While
giving sales presentations, the salesperson should always try to link the features and attributes of
the product with the customer needs so that the gap or conflict and level of customer objection
can be reduced in the subsequent stages.
Approaches to sales presentation
Attracting customer objection
Creating interest
Arousing desire and building conviction
Methods of sales presentation
Canned presentation
Organized presentation
Tailored presentation
Handling Customer Objections
Customers make objections after or during the presentations. These objections are many times
excuses for not buying. Objections normally pause the sales process because the customer either
as not fully understood the product and its benefits, or is not fully in agreement with the
salesperson.
o Start with your highest expectations
o Avoid conceding first
o Be sure the customer understands the value of a concession
o Make concessions in small amounts
o Admit mistakes and make corrections willingly
o Be prepared to withdraw a concession
o Avoid split the difference strategy
o Do not advertise willingness to concede.
Methods of handling customer objection
Superior feature method
Yes but method
Reverse English method
Indirect denial method
Pass out method
Comparison method
Direct denial method
Module 3: (6 hours)
Management of Sales Territory & Sales Quota: Sales territory, meaning, size, designing, sales
quota, procedure for sales quota. Types of sales quota, Methods of setting quota. Recruitment
and selection of sales force, Training of sales force.
Reference checks
Physical examinations
Intelligence
Personality
Aptitude and skills
Determination of terms of service
Appointment
Initial orientation
Training the salesforce
Sales training is a process of providing the salesforce with specific skills for performing their
task better and helping and helping them to correct deficiencies in their sales performance. When
a new product is introduced into the market, the market situation undergoes a change with the
entry of a new competitor or a new technology. In this case, the new product either moves across
the life cycle or salespeople are asked to perform the job in a new way. The salesforce needs to
be trained to meet these new kinds of situation. Training provides the necessary skill to the
salespeople to perform a job better and correct any lacunae in the salesforce while executing
their job responsibilities.
The training process
A sales manager has to design a training programme that will help in improving the skill and
efficiency levels of the salesforce. For the purpose of the optimum benefit to the organization,
the sales training programme should be designed by following a scientifically planned and
designed process. The training process consists of three phases namely, the training need
assessment and development, conduct of training programme, and the evaluation stage.
Training need assessment, Design and conduct of a training programme and Evaluation of a
training programme
Training need assessment
Organizational level analysis
Task level analysis
Individual level analysis
Designing and conduct phase
Location
Module 4: (8 hours)
Sales force motivation and compensation: Nature of motivation, Importance, Process and
factors in the motivation, Compensation-Meaning, Types of compensation plans and evaluation
of sales force by performance and appraisal process.
Efficient salespeople posses good knowledge about their job and can sell goods and services
to the satisfaction of the customers.
Process of Motivation
Motive
Behavior
Goal
Factors in the Motivation
Changes in marketing environment
Conflicting company objectives
Unique nature of the sales job
Separate motivational package
Compensation
It is the financial and non-financial method of rewards to the salesperson .
Financial rewards
These constitute the current spendable income, future income, profit sharing, retirement, etc.
Non-Financial benefits
There are rewards that do not directly involve money. These include promotions, recognition,
programmes, personal growth and development, security, sales contest, and expense accounts.
Types of compensation plan
Financial Compensation
Straight Salary plan
Straight commission plan
Bonus and Incentives
Salary plus incentive plan ( combination plan)
Drawing account and Commission plan
Allied method
Non-Financial Compensation
Promotions
Recognition programmes
Fringe benefits
Expense Accounts
Perks
Sales Contests
Evaluation of sales force by performance appraisal process
Deciding on the criteria for measuring performance
Deciding on the conduct of the performance appraisal
Deciding on evaluation of individuals and teams
Comparisons of actual performance with standards
Deciding on the frequency of the performance with standards
Deciding on the frequency of performance appraisal
The external variables and their influence
Deciding on the criteria for measuring performance
Relative and absolute judgment
Trait-based
Outcome based
Behavior based
Performance Rating
Force Choice Scales
Behavioral Observation Scales
Call reports
Silent call monitoring scores
Activity Reports
Combinational methods
Deciding on the conduct of the performance appraisal
Biases
Base rate information
Availability Heuristics
Anchoring
Hindsight bias
Regression effects
Fundamental attribution error
Deciding on evaluation of individual and teams
Module 5: (6 hours)
Sales management job: Standard sales management process-international sales management -
international market selection-market survey approach or strategy.
Prospecting:
Prospecting is the process of identifying potential buyer who have a need of the product or
service offered by the company, and the ability to pay for it and authority to buy it.
Prospecting is the first step in the selling process. A prospect is a person or business that needs
the product a salesperson is selling and has the ability to buy it. Therefore, prospecting is the act
of finding people who need and can buy the product. Prospecting is the lifeblood of sales.
A salesperson must look constantly for new prospects for two reasons. One is to increase sales.
The other is to replace customers who will be lost over time. A prospect should not be confused
with a lead. The name of a person or business that might be a prospect is referred to as a lead.
Once the lead has been qualified as needing the product and as having the ability to buy it, the
lead becomes a prospect.
A simple way to remember this qualifying process is to think of the word MAD. A true prospect
must have the financial resources, money or credit, to pay and the authority to make the buying
decision. The prospect also should desire the product. Sometimes an individual or organization
may not recognize a need for the product. It's the salesperson's job, then, to help create the need.
The actual methods by which a salesperson obtains prospects may vary. Several of the more
popular prospecting methods as mentioned below:
a. Leads: people and organizations salespeople know nothing, or very little about.
b. Referrals: people or organizations salespeople frequently know very little about
other than what they learned from the referral.
c. Orphans: customers whose salesperson has left the company. Company records
provide the only information about these past customers.
Pre-approach
Once the prospect has been identified and qualified, the next step in the selling process is the
preapproach. Prospecting and the preapproach are similar in that, for both, the salesperson is
gathering information to use in the attempt to make a sale. During the preapproach, the
salesperson investigates the prospect in greater depth and plans the sales call.
All sales trainers feel salespeople must carefully plan their sales calls. Although numerous
reasons exist for planning the sales call, four of the most frequently mentioned is that planning:
Helps build a salesperson's self-confidence.
Develops an atmosphere of goodwill and trust with the buyer.
Helps create an image of professionalism.
Increases sales because people are prepared.
The four facets for consideration when sales-call planning are mentioned below:
Determining sales call objectives;
Developing or reviewing the customer profile;
Developing a customer benefit plan; and
Developing the individual sales presentation based on the sales-call objective,
customer profile, and customer benefit plan.
customer.
For example, a Colgate salesperson might have the objectives of checking all merchandise,
having the customer make a routine reorder on merchandise, and selling promotional quantities
of Colgate toothpaste. Industrial salespeople develop similar objectives to determine if their
present customers need to reorder and to sell new products.
short time period is so important it is treated as an individual step in selling, referred to as "the
approach." Part of any approach is the prospect's first impression of the salesperson.
The First Impression Is Critical To Success
When a salesperson first meets a prospect, the initial impression is based on appearances and
attitude. If this impression is favorable, the prospect is more likely to listen to the salesperson,
but if it is not favorable, the prospect may erect communication barriers that can be difficult to
overcome. Like an actor, the salesperson must learn how to project and maintain a positive,
confident, and enthusiastic first impression no matter what mood the prospect is in when first
encountering the salesperson.
Approach Techniques Are Numerous
The situation the salesperson faces will determine what approach technique should be
used to begin the sales presentation. The most common approaches used in sales training
programs follow:
Introductory approach: The salesperson states his or her name and business. This is the
most common approach and also the weakest. For example, "Hello, my name is Amy
Firestone, representing the Barnhill Estate Company."
Product approach: The salesperson places the product on the counter or hands it to the
customer, saying nothing. The salesperson then waits for the prospect to begin the
conversation. This is useful if the product is new, unique, colorful, or has been changed.
If, for example, Pepsi-Cola completely changed the shape of its bottle and label, the
salesperson should simply hand the product to the retail buyer and wait.
Customer benefit approach: The salesperson asks a question that shows the product can
benefit the prospect in some way, such as saving money. For example, "How would you
like to save Rs.5000 on the purchase of your next IBM typewriter?"
Curiosity approach: The salesperson asks a question to make the prospect curious about
the product or service. For example, a textbook salesperson might ask, "Do you know
why 200 schools are using this book in their sales management courses?"
Most salespeople vary a combination of these techniques. All but the introductory approach (the
weakest) have three important characteristics in common: They capture the attention of the
prospect; they stimulate interest; and they provide a smooth transition into the presentation.
Presentation
The presentation itself is a continuation of the approach. What, then, should be the purpose of the
presentation? Basically, the purpose of the presentation is to provide knowledge about the
features, advantages, and benefits of the product, marketing plan, and business proposal. This
allows the buyer to develop positive personal beliefs about the product. Such beliefs result in a
desire (or need) for the product. The salesperson's job is to convert the need into a want and
finally into the belief that this specific product is the best product to fulfill a certain need.
Furthermore, the sales rep must convince the buyer that not only is this product the best but also
that this seller is the best source from which to buy it.
The Sales Presentation Mix
When developing a presentation, salespeople should consider which elements of the sales
presentation mix (as in Figure) they will use for each prospect. The proper use of persuasive
communication techniques, methods to encourage prospect participation, proof statements, visual
aids, dramatization, and demonstrations can greatly increase a salesperson's chance of showing
the prospect how the products will satisfy his or her needs. As we know, it is often not what we
say but how we say it that results in making the sale. Persuasive communication techniques
such as questioning, listening, logical reasoning, suggestion, and trial closes help to uncover
needs, communicate effectively, and pull the prospect into the conversation. Proof statements
substantiate the claims salespeople make. They are especially useful for showing prospects that
what they are saying is true and that they can be trusted. When challenged about a product
statement, salespeople should "prove it" by incorporating into their presentation facts on a
customer's past sales, guarantees the product will work or sell, testimonials, or company and
independent research results.To both show and tell, visuals should highlight a product's features,
advantages, and benefits through the use of graphics, dramatization, and demonstration. This
technique captures the prospect's attention and interest; creates two-way communication and
participation; expresses the proposition in a clearer, more complete manner; and makes more
sales. Careful attention to the development and rehearsal of the presentation is needed to ensure
that it is carried out smoothly and naturally.
At any time salespeople should be prepared for the unexpected a demonstration that breaks
down, interruptions, questions about the competition, or the necessity for making a presentation
in a less-than-ideal place such as the aisle of a retail store or the warehouse.
The presentation part of the overall sales presentation is the heart of the sale. It is where the
salesperson develops desire, conviction, and action. By giving an effective presentation, the
sales rep will have fewer objections to the proposition, which makes for an easier close of the
sale.
does most of the talking. Only occasionally does the prospect get to talk. The salesperson does
not know what the prospect needs, so all aspects of the product are first discussed, and then the
prospect is asked to buy.
If no sale occurs, the presentation is begun again, and another attempt is made to close the sale. A
"canned" presentation is an example of this approach. Everyone is told basically the same thing.
If time is short, the unit price is low, or the salesperson confronts the prospect infrequently or
only once, this approach might be considered. The salesperson goes directly to the presentation
stage of the sales process and quickly asks for the order. This method is relatively ineffective for
more-complicated selling situations. Here are some of the method's shortcomings:
Talks about product features not important to buyer.
Uses same "pitch" for different people.
Assumes salesperson is in total control.
Has little prospect participation, making it difficult to uncover needs.
Formula Method
This approach is like the stimulus-response method in that it is based on the assumption that all
prospects are alike. However, here something is known about the prospect, so the presentation is
slightly less structured than it is with the stimulus-response method. The salesperson may use a
structured series of steps such as the AIDA approach.
AIDA stands for attention, interest, desire, and action; conviction may be added to form
AIDCA, indicating the point at which the prospect feels the benefits outweigh the costs
associated with the product. The approach is not complex and easily can be adapted to various
situations.
The salesperson plans or "cans" the sales talk to quickly get attention and interest so the prospect
will listen to the presentation. For the desire step, the salesperson translates the product's
features and advantages into benefits for the prospect. Action or closing techniques are then
used to make the sale. The AIDA method can be used if time is short, if prospects are the same,
or if the salesperson lacks the ability to develop individualized sales presentations. The
shortcomings of this approach are the same as those of the stimulus-response method.
Need-Satisfaction Method
The need-satisfaction method is different from the stimulus-response and the formula
As the salesperson is listening to the prospect, he or she mentally notes the product's features,
advantages, and benefits in relation to the prospect's needs. If the salesperson is not clear on
some things the prospect says, he or she should ask questions or restate what the prospect has
said to make sure the prospect's needs and desires are completely expressed and understood.
Once this stage is accomplished, the salesperson is ready to show how the products will satisfy
the prospect's needs. The presentation can be personalized or concentrate on the specific features
the salesperson's product can offer that will fulfill the prospect's needs.
Trial Close
The trial close involves checking the prospect's attitude toward the sales presentation. It may
occur anytime during the selling process. However, it is especially useful
(1) after making a strong selling point,
(2) after overcoming an objection, or
(3) once the presentation is complete
It is used to check the buyer's "pulse" or mood to determine whether he or she is paying attention
to the presentation and whether it is time to ask for a purchase.
"Some prospects are ready to buy early in the presentation, whereas others take longer. The
reason a trial close is used centers on the psychological aspect of a prospect saying no when the
salesperson attempts to close the sale. Once the prospect has said no, the salesperson may have
difficulty moving from that position.
So, to avoid this, salespeople may at any time use a trial close like one of these:
How does that sound to you?
What color do you prefer?
If you bought this, where would you use it in your business?
Are these features what you are looking for?
If the prospect responds favorably, the salesperson can move on to the close. However, if a
negative response is received, the close can be postponed. The salesperson may need to
completely start over with the presentation.
Objections:
Theoretically, a salesperson's presentation should show the prospect that a need exists, that the
product presented can best fill that need, and that further discussion should not be necessary.
Very few presentations end that successfully, and very few prospects are that easily convinced.
Usually, the prospect will raise some objections.
Experienced salespeople welcome objections. An objection is opposition or resistance to
information or a request. It shows that the prospect is interested in the product and that if the
objections can be answered to the satisfaction of the prospect, the sale will be made. If, on the
other hand, the prospect simply sits quietly, making noncommittal sounds, and at the end of the
presentation simply says, "That's nice. I'm not interested. Good-bye," the salesperson has no
grounds for continuing, and the sale is lost.
Types Of Objections
Two types of objections occur: real or practical objections and hidden or psychological
objections. Real objections are tangible, such as about a too-high price. If this is a real objection
and the prospect says so, then the salesperson can show that the product is of high quality and
worth the price or remove some optional features and reduce the price.
As long as the prospect clearly states the real objection to purchasing the product, the salesperson
should be able to answer the objection and go into the close. However, prospects will not always
be so agreeable and clearly state their objections. Rather, they will give some excuse about why
they are not ready to make a purchase, thereby keeping their real objections hidden. Usually the
prospect will not purchase the product until those hidden objections are somehow answered.
Postponing Objections Often the prospect may skip ahead of the sales presentation. The
salesperson then may want to postpone the objection until he or she has presented the background
that would allow it to be met completely.
Prospect "Your price is too high."
Salesperson "In just a minute I'll show you this product is reasonably priced based on the savings
you will receive compared with what you are presently doing."
Boomerang One important selling skill to teach salespeople is how they can turn an objection
into a benefit or a reason to buy. Take, for example, the wholesale drug salesperson who wants to
sell a pharmacist a new type of container for prescription medicines. The salesperson hands the
pharmacist a container.
Prospect: "They look nice, but I don't like them as well as my others. The tops seem hard to get
off."
Asking Questions Questioning the prospect is another selling skill salespeoplecan learn.
Prospect "I do like this house, but it is not as nice as the one someone else showed us yesterday."
Salesperson: "Would you please tell me why?"
Real objections must be uncovered and properly dealt with in a straightforward manner.
Objections can become a positive factor in the sales presentation if they allow the prospect to
open up and participate in the dialogue.
The salesperson should not move to close the sale before handling sales resistance. However, if
the objections appear to make the sale impossible, the salesperson has the option of not closing
and waiting until another day or going ahead and asking for the business. Before closing or
asking for the order, the salesperson may want to use another trial close.
Close
All of the effort that has gone into the prospecting, pre-approach, approach, and presentation has
as its aim a successful close. Closing is the process of helping people makes a beneficial decision.
It is the part of the selling process that ultimately brings the sale to a conclusion. If all goes well,
the conclusion will be positive; however, it can be negative.
The close can be difficult for some people. For numerous reasons, some salespeople fail to make
a sale or even fail to attempt to close. First, a salesperson may not be confident in his or her
ability to close. Perhaps numerous failures to make a sale have brought about this situation.
Second, salespeople often determine on their own that the prospect does not need the quantity or
type of merchandise or that the prospect simply should not buy. Finally, the person may be a poor
salesperson. Quite often proper sales training and encouragement from management can greatly
increase a person's selling ability.
Closing Techniques
A major key to making a sale is using effective closing methods. Different techniques work for
different people. Here are several examples.
The Compliment For this technique, the salesperson may compliment the prospect by saying
something like "It is obvious you know a great deal about the grocery business. You have 'every
square foot of your store making a good profit. Our products have the profit margin you want,
and they sell like hotcakes, so you'll make an above-average profit. I suggest you buy one dozen
mops and one dozen brooms for each of your 210 stores."
Follow-Up
Providing service to customers is critical to successfully managing a sales territory.
Follow-up and service create goodwill between a salesperson and the customer, which in the long
run will increase sales faster than not providing such service. By contacting the customer after the
sale to see that the maximum benefit is being derived from the purchase, a salesperson lays the
foundation for a positive business relationship. Remember, it's easier to keep a customer than to
find a new
International marketing focuses its resources on global market opportunities and threats
(Keegan and Green)
International marketing is the motor of the internationalization process of the firm (Usunier)
International Marketing Decisions
Deciding whether to go abroad
Deciding which markets to enter
Deciding how to enter the market
Deciding on the marketing program
Deciding on the marketing organization
Driving Forces of International Marketing
Technology
Culture
Market Needs
Costs
Free Markets
Economic Integration
Peace
Strategic Intent
Management Vision, Strategy and Action
Role of the sales manager in the international market:
Basic level functions:
o Training
o Evaluating
o Planning
o Compensation
Advanced level functions:
o Strategic account management
o Conducting negotiations
o Arranging agreements with distributors
o Developing relations and network locally
Joint ventures: A business arrangement in which two or more parties agree to pool their
resources for the purpose of accomplishing a specific task. This task can be a new project or any
other business activity. In a joint venture (JV), each of the participants is responsible for profits,
losses and costs associated with it. However, the venture is its own entity, separate and apart
from the participants' other business interests.
Wholly owned subsidiaries: A company whose common stock is 100% owned by another
company, called the parent company. A company can become a wholly
owned subsidiary through acquisition by the parent company or spin off from the parent
company. In contrast, a regular subsidiary is 51 to 99% owned by the parent company. One
situation in which a parent company might find it helpful to establish a subsidiary company is if
it wants to operate in a foreign market. This arrangement is common among high-tech companies
who want to retain complete control and ownership of their technology.
International market selection
International market selection is crucial in selecting the target market.
Firm related factors
Ethnocentric: everything is centered on the domestic market.
Polycentric: several important foreign markets exist.
Regiocentric: the market is composed of several large economic regions.
Geocentric: the world is one large global market.
Market related factors
General factors
o Economic factors
o Business regulations
o Political factors
Specific factors
o Trends in domestic market
o Trends in export and import
o Nature of competition
o Supply conditions of raw materials
Other Factors
o Political restrictions
o Special requirements
o Product specification
o Distant location
o Market accessibility
o Business community
Market Selection Process
1. International marketing objectives
2. Commercial Parameters for production selection
3. Preliminary Test marketing screening
4. Evaluation and Short listing of selection markets
International sales techniques:
Personal selling process
o Preliminary selling
Identify prospects
Approach
Advanced selling
o Sales interview
o Flexible presentation
o Product demonstrations
o Handling objections
o Close
o After sales techniques
Time and territory management
o Proper routing & scheduling
Routing is a travel plan or pattern used by a sales person for making customers calls in a
territory.
Scheduling refers to establishing a fixed time when the salesperson will be at a customers place
of business. It is planning a salespersons specific time of visits to customers.
Strict formal route designs enable the salesperson to: \
Improve territorial coverage.
Minimize wasted time.
Establish communication between management and the sales force in terms of the
location and activities of individual salespeople.
Module 6: (8 hours)
Sales Manager and Sales Person: Role of sales manager and sales people; functions of sales
manager, , types and characteristics of sales manager and sales people-
Time management for sales manager and sales person.
Marketing Decision
The sales manager must consult with the production manager time to time because they are
closely related with the sales needs. The sales manager reviews the revenues & expenses of the
company and checks the actual sale and compare it with the corrective action may be taken in
time. So, the sales manager maintains the proper balance of time spent on various activities and
keeps a check on the activities of the sales force.
Organization
The sales manager establishes an effective plan of organization and methods of controlling the
activities of members, so that the work will be completed in time. The activities are identified &
grouped and hence assigned to individuals responsible for selling a given product.
Motivating:
Setting targets and tracking the results: new accounts, amount to be generated, ratio of
sales per customer etc. .
Additional targets for the prospecting efforts .
Setting realistic and achievable targets and publicizing on achievement of targets
Recognizing & rewarding performance: tangible incentives (trophy / extra leave / paid
vacation / memberships etc.) or public appreciation at sales meeting
Providing leads and sales support: hurdles of sales people are to be cleared ( lack of
secretarial support / sales aids etc) .
Continuous development of new businesses, identify leads make the sales task easier for
his team
Organizing sales effort: ensures that sales people plan their calls in advance and follow a
systematic process of call reporting and filing expense reports . By organizing sales
efforts of sales peoples their efficiency in meeting targets can be increased.
Conducting sales meetings : prime responsibility as it works as great morale booster,
Frequency depends on the requirements.
Agenda to be sent before hand to ensure participants come prepared.
Review of organizational, individual sales performance, recognize and reward excellent
performers,
Organizing guest lectures ( motivational) .
Ensure that all the issues and problems are resolved by the end of the meeting.
Some times sales meetings become ineffective, so the sales manager needs to ensure that
such things do not happen.
Allocation of scarce resources: aid of sophisticated technology can be taken e.g. general
mills uses what if analysis Responsibilities of a sales manager
Fulfilling the demands of all the above mentioned groups is needed but, often expectations of
one group may be in conflict with that of the other group. And the sales person needs to balance
all of them. With the advances in technology their role extended to business strategy too, where
establishment of mutually beneficial relationship is needed with important customers E.g. P&G
Role of a sales executive
Thus, a field sales manager provides the administrative sales manager with the latest information
relating to the viewpoints of dealers and consumers on company, company products, policies,
and practices with facts on market trends, competitors, distributors and individual salesman.
3. Administrative-cum-field sales manager:
In case of smaller organisations, we come across such sales manager who combines the functions
of administrative and executive sales officer. Generally speaking, administration and field
operations cannot go together. However, size and economy points force many units to combine
the distinct roles of administration and field operation.
As an administrator, he plans, organizes, directs and coordinates. As a field operator, he guides
and supervises and controls the activities within the sales organisation. Thus, thinking and doing
are done by the same person that goes against the very idea of specialisation for an administrator
is a thinker and a line officer as doer.
4. Assistant sales manager:
Generally, the administrative sales manager is assisted by Assistant sales manager in the
administrative functions of planning, analysis, direction and coordination. He coordinates the
work of sales staff that is specialized in advertising, sales-promotion, research, merchandising
and dealer relations.
He may also handle sales office personnel, records and routine. He acts as the link between the
head-quarters and the field-sales-manager at distance. It is not a surprise if he discharges the
functions of field sales manager. Thus, he acts as both line and staff officer in the sales
organisation.
5. Product-line sales manager:
A company that markets variety of products has such product-line sales manager responsible for
one or group of products in the product- line. He is also known as product or brand manager.
He is responsible not only for sales but also for production, research, product- development,
planning, advertising and profit for the product or the group of products in question. He is to
report to the Marketing manager who coordinates the work of several product sales managers.
6. Marketing staff manager:
As the title suggests, the Marketing staff manager is not a line-officer. He is one of the staff
specialists who are delegated some of the responsibilities of administrative sales manager. These
are the specialists in the areas of marketing research, sales-promotion, merchandising,
advertising, sales planning, sales personnel, distributor/dealer relations, sales costs, budget sales
finances, traffic, sales office administration and service and the like. These staff managers being
non-line officers have no field tasks.
These managers are accountable for analysing the needs of the marketing organisation in respect
of their specific areas of specialisation, developing plans and recommending solutions to the
problems encountered or thrown open.
7. Divisional/regional sales managers:
In all the national organisations, one comes across these Divisional or Regional sales managers.
These are also known as District sales managers who are responsible for the delegated sales
operational duties on a territorial basis.
They report to Assistant sales managers or the field sales managers who act as the liaison officers
with headquarters. The functions of Divisional or Regional sales manager are similar to those of
field sales manager who is in charge of several divisions or regions and hence divisional or
regional managers.
They are mainly responsible for maintaining the man-power in the concerned areas by recruiting,
selecting, and training, supervising, motivating and controlling the sales-force.
They are also responsible for directing branch or local office sales managers. The divisional sales
managers assist branch managers in solving their sales personnel problems, dealer relations,
warehousing and inventory, advertising and sales promotion, sales campaigns and sales
meetings.
8. Branch sales mangers:
In case of sales organisations that operate branches or local sales offices in major cities of the
country, one is to come across such Branch sales managers. Branch sales manager is a line
executive responsible for the direction of a small group of salesmen calling on consumers or
dealers in the branch area.
He recruits, selects and trains, sales people with the guidance of Divisional or Regional sales
manager to whom he reports. He works along with salesmen in the field, supervises their sales
activities, holds periodic sales meetings, evaluates sales performance and helps in key accounts.
If warehouse is attached to branch, he supervises warehousing activities too.
9. Sales supervisor:
A sales supervisor is a line sales manager who supervises normally eight to fourteen salesmen.
He is seen in branch sales office of a national sales organization having branches all over the
nation.
Relational
The relational salesperson thrives off of the customer-salesperson relationship. This type of
salesperson is good at quickly building rapport with the customer and often gets sales because
the buyer likes her enough that she becomes the deciding factor in the sales process. These
salespeople also establish the long-term relationship with a customer that brings the customer
back around for repeat business. These types of salespeople tend to excel in industries like
advertising or any type of sales where established accounts selling is important.
Closers
A large portion of the sales force in many different industries is made up of closers or those who
are always trying to close the deal on a sale. These are what many people think of when they
think of the used car salesman. This type of salesperson is constantly inching the customer
toward the goal of closing the deal. While relationships with customers may still be important for
future sales with this type of salesperson, they are usually secondary to the immediate goal of
going for the close.
Consultants
Consultants are probably the most well-rounded of the different types of salespeople. These are
people persons who know how to close a deal and build relationships at the same time.
Consultants genuinely thrive off of the problem-solving aspect of their job, listening to customer
needs and helping them find a solution to their problem. Consultants have superior listening
skills and tend to be patient with customers when necessary, but aggressive when necessary also.
A person with focus is internally driven to accomplish goals and can stay attentive to one
topic. Focused individuals are more demanding of themselves than other people and they are
self-motivated. They are able to organize themselves and recognize what needs to be done in
order to achieve their goals.
Responsibility
A person with a strong sense of responsibility does not place blame on other people when placed
in a difficult situation. This type of person, referred to as an agent, gets things done and when
obstacles arise, accepts any errors or omissions that have occurred. He or she does not get
defensive nor do they try to blame the situation on circumstances or on other people by making
statements such as, Its not my fault boss that consumer confidence has declined due to
terrorism and the war in Afganistan. Sales managers should strive to hire agent-type
representatives.
Optimism
A salesperson with a healthy amount of optimism can be described as someone who is slow to
learn helplessness. This person has persistencea trait that is critical in the sales world because
of the frequency of rejections salespeople experience. In the face of failure, some people throw
their hands up in the air and resign themselves to the disappointment because they feel helpless
to change the situation. Others, however, see themselves as being more resilient and that a
customers refusal is NOT a rejection of themselves personally, but of the opportunity being
offered. Salespeople who possess a large amount of optimism like themselves and when they
encounter failure, although disappointed, it does not destroy their positive view of
themselves. They consider themselves still in the running and able to turn the situation
around. They believe that they can make things better by using a different approach, or by trying
again.
Ego-drive
Ego-drive is similar to optimism in that both traits require persistence. But ego-drive is
persistence for the purpose of succeeding and above all winning. Its all about
competitiveness. When a person hangs in there with fists clenched and a teeth gritting appetite
to succeed at his or her goal, you see a powerful ego-drive. This person is self-motivated and a
self-starter with clear ideas of what he or she wants to achieve.
Module 7: (8 hours)
Selling on the internet: Selling agents for internet trading-net selling, advertising in net trading,
payment system in internet trading-smart card, credit card, debit card- payment by card:
advantages and disadvantages; How to make internet selling safe-Digital signature, biometric
method and legal or regulatory environment; Growth of internet trading in India.
Investing online, also known as online trading or trading online, is the process by which
individual investors and traders buy and sell securities over an electronic network, typically with
a brokerage firm. This type of trading and investing has become the norm for individual
investors and traders since late 1990s with many brokers offering services via a wide variety
of online trading platforms.
The act of placing buy/sell orders for financial securities and/or currencies with the use of a
brokerage's internet-based proprietary trading platforms. The use of online trading increased
dramatically in the mid- to late-'90s with the introduction of affordable high-speed computers
and internet connections.
'Net Sales' The amount of sales generated by a company after the deduction of returns,
allowances for damaged or missing goods and any discounts allowed. The sales number reported
on a company's financial statements is a netsales number, reflecting these deductions.
Electronic Payment systems
Electronic Payment is a financial exchange that takes place online between buyers and sellers.
The content of this exchange is usually some form of digital financial instrument (such as
encrypted credit card numbers, electronic Cheques or digital cash) that is backed by a bank or an
intermediary, or by a legal tender.
Electronic payment system is a system which helps the customer or user to make online payment
for their shopping.
The various factors that have lead the financial institutions to make use of electronic payments
are:
Decreasing technology cost:
The technology used in the networks is decreasing day by day.
Reduced operational and processing cost:
Due to reduced technology cost the processing cost of various commerce activities becomes very
less. A very simple reason to prove this is the fact that in electronic transactions we save both
paper and time. Increasing online commerce:
Types of EPS
1. E-cash: A system that allows a person to pay for goods or services by transmitting a number
from one computer to another. Like the serial numbers on real currency notes, the E-cash
numbers are unique. This is issued by a bank and represents a specified sum of real money.
2. E-wallets: The E-wallet is another payment scheme that operates like a carrier of e-cash and
other information. The aim is to give shoppers a single, simple, and secure way of carrying
currency electronically. Trust is the basis of the e-wallet as a form of electronic payment.
3. smart cards
4. credit cards
Smart card
The smart card looks exactly like any other plastic card or an ATM card with an integrated
circuit (IC Chip) installed. The IC chip contains memory, may contain a processor, and
communicates with the external world through contacts on the surface of the card. The size,
position and utility of the contacts are specified by an international standard, so that cards can
interact with a variety of equipment.
Debit card
A payment card that deducts money directly from a consumers checking account to pay for a
purchase. Debit cards eliminate the need to carry cash or physical checks to make purchases. In
addition, debit cards, also called check cards, offer the convenience of credit cards and many of
the same consumer protections when issued by major payment processors like Visa or
MasterCard. Unlike credit cards, they do not allow the user to go into debt, except perhaps for
small negative balances that might be incurred if the account holder has signed up for overdraft
coverage. However, debit cards usually have daily purchase limits, meaning it may not be
possible to make an especially large purchase with a debit card.
A bank-issued card that allows its user to access their funds for the purpose of paying for
merchandise. A debit card acts like a credit card, the difference being that funds are immediately
taken from the cardholders accounts.
Credit card
Pre-approved credit which can be used for the purchase of items now and payment of them later.
Standard-size plastic token, with a magnetic stripe that holds a machine readable code. Credit
cards are a convenient substitute for cash or check, and an essential component of electronic
commerce and internet commerce.
Credit card holders (who may pay annual service charges) draw on a credit limit approved by the
card-issuer such as a bank, store, or service provider (an airline, for example). Cardholders
normally must pay for credit card purchases within 30 days of purchase to
avoid interest and/or penalties.
Classification of Credit card
Based on mode of credit recovery
Charge Card-A card that charges no interest but requires the user to pay his/her balance in full
upon receipt of the statement, usually on a monthly basis. While it is similar to a credit card, the
major benefit offered by a charge card is that it has much higher, often unlimited, spending
limits.
Revolving credit card-A line of credit where the customer pays a commitment fee and is then
allowed to use the funds when they are needed. It is usually used for operating purposes,
fluctuating each month depending on the customer's current cash flow needs
Easy to obtain. Once you open an account most institutions will issue you a debit
card upon request.
Convenience. Purchases can be made using a chip-enabled terminal or by swiping
the card rather than filling out a paper check.
Safety. You don't have to carry cash or a checkbook.
Readily accepted. When out of town (or out of the country), debit cards are
usually widely accepted (make sure to tell your financial institution youre leaving
your city; to not have an interruption in service).
Disadvantages of a Debit Card
No grace period. Unlike a credit card, a debit card uses funds directly from your
checking account. A credit card allows you to borrow funds on credit, leaving
disposable cash in your account.
Check book balancing. Balancing your account may be difficult unless you
record every debit card transaction.
Less protection. Most financial institutions will try and protect their customer
from debit card fraud. However, a customer could potentially be liable for up to
$500 on fraudulent debit card transactions compared with only $0 on credit cards.
Be sure to check with your financial institution to learn the details.
Fees. Using your debit card for ATM transactions may be costly if the ATM is not
affiliated with your institution.
The advantages of credit cards
Credit cards are convenient and are safer to carry around than cash. They are widely accepted
online, in most stores, and are virtually indispensable for travel.
They frequently provide insurance cover for goods and services that are purchased with them.
Consumer law in countries like the UK provides a broad spectrum of protection for consumers
who purchase goods or services with credit cards.
When credit card users pay off their monthly balance in full, they pay no interest. This often
means that up to 42 days free credit is available.
On top of that, many credit card companies offer bonuses to their customers. These come in
many forms. A popular one is cash back on payment of the balance, while another common one
is air miles.
Make your meeting a two-step process. Arrange to meet during daylight hours and have a
friend be there with you.
o First, meet in a public place close to your house. Ask for proof of identity such as
a drivers license. (That way you know who youre dealing with if theres is a
problem.) Note the license plate number, color, and model of the buyers vehicle
so you have it in the event there is trouble.
o If youre comfortable that the buyer seems legitimate, have them follow you and
your friend to your house.
If more than one person arrives, keep them together. A common ploy is for one person to
engage you with questions while another asks to use the restroom. Decline. This splits
your ability to supervise and increases their ability to scope out more of your house and
any items worth stealing. It may seem rude to refuse to let someone use your bathroom,
but it isnt. Let them know where the closest public bathroom is located.
Dont hand over the item until you have cash in hand. Dont accept partial payment, or
anything other than cash for the transaction. If the method of payment changes from your
previous agreement, decline the deal.
If the potential buyer wants time to consider and comes back later, follow the same
procedures. Dont get careless the second time around.
1. Digital signature: a digital code (generated and authenticated by public key encryption) which
is attached to an electronically transmitted document to verify its contents and the sender's
identity.
The digital equivalent of a handwritten signature or stamped seal, but offering far
more inherent security, a digital signature is intended to solve the problem of
tampering and impersonation in digital communications. Digital signatures can
provide the added assurances of evidence to origin, identity and status of an electronic
document, transaction or message, as well as acknowledging informed consent by the
signer.
Government networks, passport programs and driver licenses, colleges, physical access to
multiple facilities (e.g., nightclubs) and school lunch programs.
Biometric-based authentication applications include workstation, network, and domain access,
single sign-on, application logon, data protection, remote access to resources, transaction
security and Web security. Trust in these electronic transactions is essential to the healthy
growth of the global economy. Utilized alone or integrated with other technologies such as
smart cards, encryption keys and digital signatures, biometrics are set to pervade nearly all
aspects of the economy and our daily lives. Utilizing biometrics for personal authentication is
becoming convenient and considerably more accurate than current methods (such as the
utilization of passwords or PINs). This is because biometrics links the event to a particular
individual (a password or token may be used by someone other than the authorized user), is
convenient (nothing to carry or remember), accurate (it provides for positive authentication),
can provide an audit trail and is becoming socially acceptable and inexpensive.
Biometric authentication requires comparing a registered or enrolled biometric sample
(biometric template or identifier) against a newly captured biometric sample (for example, a
fingerprint captured during a login). During Enrollment a sample of the biometric trait is
captured, processed by a computer, and stored for later comparison.
Biometric recognition can be used in Identification mode, where the biometric system
identifies a person from the entire enrolled population by searching a database for a match
based solely on the biometric. For example, an entire database can be searched to verify a
person has not applied for entitlement benefits under two different names. This is sometimes
called "one-to-many" matching. A system can also be used in Verification mode, where the
biometric system authenticates a person's claimed identity from their previously enrolled
pattern. This is also called "one-to-one" matching. In most computer access or network access
environments, verification mode would be used. A user enters an account, user name, or
inserts a token such as a smart card, but instead of entering a password, a simple touch with a
finger or a glance at a camera is enough to authenticate the user.
There is no one "perfect" biometric that fits all needs. All biometric systems have their own
advantages and disadvantages. There are, however, some common characteristics needed to
make a biometric system usable. First, the biometric must be based upon a distinguishable
trait. For example, for nearly a century, law enforcement has used fingerprints to identify
people. There is a great deal of scientific data supporting the idea that "no two fingerprints are
alike." Technologies such as hand geometry have been used for many years and technologies
such as face or iris recognition have come into widespread use. Some newer biometric
methods may be just as accurate, but may require more research to establish their uniqueness.
Another key aspect is how "user-friendly" a system is. The process should be quick and easy,
such as having a picture taken by a video camera, speaking into a microphone, or touching a
fingerprint scanner. Low cost is important, but most implementers understand that it is not
only the initial cost of the sensor or the matching software that is involved. Often, the life-
cycle support cost of providing system administration and an enrollment operator can overtake
the initial cost of the biometric hardware.
The advantage biometric authentication provides is the ability to require more instances of
authentication in such a quick and easy manner that users are not bothered by the additional
requirements. As biometric technologies mature and come into wide-scale commercial use,
dealing with multiple levels of authentication or multiple instances of authentication will
become less of a burden for users. An indication of the biometric activities.
Fingerprints: The patterns of friction ridges and valleys on an individual's fingertips are
unique to that individual. For decades, law enforcement has been classifying and determining
identity by matching key points of ridge endings and bifurcations. Fingerprints are unique for
each finger of a person including identical twins. One of the most commercially available
biometric technologies, fingerprint recognition devices for desktop and laptop access are now
widely available from many different vendors at a low cost. With these devices, users no
longer need to type passwords - instead, only a touch provides instant access. Fingerprint
systems can also be used in identification mode. Several states check fingerprints for new
applicants to social services benefits to ensure recipients do not fraudulently obtain benefits
under fake names. New York State has over 900,000 people enrolled in such a system.
Face Recognition: The identification of a person by their facial image can be done in a
number of different ways such as by capturing an image of the face in the visible spectrum
using an inexpensive camera or by using the infrared patterns of facial heat emission. Facial
recognition in visible light typically model key features from the central portion of a facial
image. Using a wide assortment of cameras, the visible light systems extract features from the
captured image(s) that do not change over time while avoiding superficial features such as
facial expressions or hair. Several approaches to modeling facial images in the visible
spectrum are Principal Component Analysis, Local Feature Analysis, neural networks, elastic
graph theory, and multi-resolution analysis.
Some of the challenges of facial recognition in the visual spectrum include reducing the impact
of variable lighting and detecting a mask or photograph. Some facial recognition systems may
require a stationary or posed user in order to capture the image, though many systems use a
real-time process to detect a person's head and locate the face automatically. Major benefits of
facial recognition are that it is non-intrusive, hands-free, continuous and accepted by most
users.
Speaker Recognition: Speaker recognition has a history dating back some four decades,
where the output of several analog filters were averaged over time for matching. Speaker
recognition uses the acoustic features of speech that have been found to differ between
individuals. These acoustic patterns reflect both anatomy (e.g., size and shape of the throat and
mouth) and learned behavioral patterns (e.g., voice pitch, speaking style). This incorporation
of learned patterns into the voice templates (the latter called "voiceprints") has earned speaker
recognition its classification as a "behavioral biometric." Speaker recognition systems employ
three styles of spoken input: text-dependent, text-prompted and text independent. Most speaker
verification applications use text-dependent input, which involves selection and enrollment of
one or more voice passwords. Text-prompted input is used whenever there is concern of
imposters. The various technologies used to process and store voiceprints includes hidden
Markov models, pattern matching algorithms, neural networks, matrix representation and
decision trees. Some systems also use "anti-speaker" techniques, such as cohort models, and
world models.
Ambient noise levels can impede both collection of the initial and subsequent voice samples.
Performance degradation can result from changes in behavioral attributes of the voice and
from enrollment using one telephone and verification on another telephone. Voice changes due
to aging also need to be addressed by recognition systems. Many companies market speaker
recognition engines, often as part of large voice processing, control and switching systems.
Capture of the biometric is seen as non-invasive. The technology needs little additional
hardware by using existing microphones and voice-transmission technology allowing
recognition over long distances via ordinary telephones (wire line or wireless).
Iris Recognition: This recognition method uses the iris of the eye which is the colored area
that surrounds the pupil. Iris patterns are thought unique. The iris patterns are obtained through
a video-based image acquisition system. Iris scanning devices have been used in personal
authentication applications for several years. Systems based on iris recognition have
substantially decreased in price and this trend is expected to continue. The technology works
well in both verification and identification modes (in systems performing one-to-many
searches in a database). Current systems can be used even in the presence of eyeglasses and
contact lenses. The technology is not intrusive. It does not require physical contact with a
scanner. Iris recognition has been demonstrated to work with individuals from different ethnic
groups and nationalities.
Hand and Finger Geometry: These methods of personal authentication are well established.
Hand recognition has been available for over twenty years. To achieve personal authentication,
a system may measure either physical characteristics of the fingers or the hands. These include
length, width, thickness and surface area of the hand. One interesting characteristic is that
some systems require a small biometric sample (a few bytes). Hand geometry has gained
acceptance in a range of applications. It can frequently be found in physical access control in
commercial and residential applications, in time and attendance systems and in general
personal authentication applications.
Signature Verification: This technology uses the dynamic analysis of a signature to
authenticate a person. The technology is based on measuring speed, pressure and angle used by
the person when a signature is produced. One focus for this technology has been e-business
applications and other applications where signature is an accepted method of personal
authentication.
Legal significance of biometric data, including raw biometric images and biometric templates,
has been discussed by many legal and non legal professionals. Although there were different
views about whether a biometric template should be regarded as personal data, or personal
related data (Grijpink, J. 2001), or anonymous data (Prins, C.1998), there is no denying that raw
biometric data is personal data in the sense of the EU directive. In the report to the European
Commission, Paul de Hert (2005) had given a clear clarification as to why a biometric template
should also be regarded a personal data. It will be tedious to repeat it here as basically we have
similar arguments. Hence the starting point of our discussion is biometric data including raw
image and templates, should be regarded as personal data covered by the Data Protection
Directive.
Growth of internet trading in India
ADVANTAGES OF ONLINE TRADING
1. Provides with the Freedom of Information
The Internet provides a new sense of controlling our financial future as the amount of investment
information available online is truly outstanding. An investor can-
Know the price of any stock he desires at any point time on the internet.
An investor can review the price history of any stock in chart format online
An investor can follow in-depth the events happening in the market
Helps an investor in receiving a wealth of free commentary and analysis about stock
markets in the global economy
Helps an investor to conduct an extensive financial research of any company he desires
He may also consult with other investors online present around the world
Some online stock broking companies provide real-time stock quotes, daily roundups of the
stock market, expert commentary, and a deep community of fellow investors.
2. Provides Control to Investors Money
When an investor wants to buy or sell stock he no longer need to call his broker on the phone
thus helping in the execution of the order instantly on the internet.
3. Provides access to the market
Through the sophisticated information streams, dedicated trading platforms and sophisticated
tools the investor can access the markets which provides more agility in buying and selling
stocks.
4. Ensures the best price for investors
Some companies like Investsmart (IL&FS)specialize in the techniques which offers the best
price deals for the buy and sell orders of the investors and traders providing the high level of
transparency by displaying of information relating to the specific stocks and company profiles
which helps in getting the best quote for the orders
5. Online trading offers greater transparency
Online trading offers the investors with greater transparency by providing with an audit trail. The
process involves a complete integrated electronic chain starting from order placement, to
clearing and settlement and finally ending with a credit into the depository account of the
investor. All these stages are inspected which brings the transparency into the system.
6. Provides hassle free trading
Online trading provides an integration of the bank account, trading account and demat accounts,
which leads to easy and paperless trading for the client.
7. Online trading allows instant trade execution
Online transactions helps in the quick execution of the entire trading transaction right from
logging to the traders site and to the settlement of the bank account in a very short period of time.
8. It provides a level playing field
Trading online gives even the smallest retail investor access to information which was earlier
available only to the big traders. It has provided with a level playing field for all investors in the
securities market.
9. Online trading reduces the settlement risk
This method of trading reduces the settlement risk for the investor as when a short sell order is
played the orders are squared off at the specified cut-off time and are not allowed to be carried
forward.
10. Provides live financial news & analysis
The online sites also provide live terminals which provide streaming news to give investor the
latest financial information as it occurs.
11. Online help desk
Some companies provide online help desk an investor cancan contact the Tele Trading
Executives from the Tele Trading team during and after market hours and can clarify questions.
12. Instant order trade confirmations
Through online trading every trade is confirmed immediately and investor receives an on-screen
confirmation following every trade with full details for the investors records which avoids costly
errors that would have been discovered when it is too late.
June 2003 to over 140,000 in the mid 2005. Out of total customer base of 180,000 majority were
online customers. Indiabulls appointed 2,000 relationship managers to handle online clients.
In the recent past years of 2005 ICICIDirect and Indiabulls recorded an annual volume growth of
100 per cent and IndiaBulls had about 30 per cent of India's online trading volumes.
In the year 2005 the online revenues grew faster for Indiabulls than offline revenues (online
revenues increased from 40 per cent to 60 per cent of the total year 2004 and clients wanted a
backup while trading online.
ICICI Direct had 7.5 lakh registered users online in the tear 2005 more than five times what
Indiabulls had. In 2005 number of demat accounts doubled to 7.1 million with the facility of
online trade since 2002. From the years 2000-2005 the online broking grew to account for a tenth
of the total trading volumes. If the numbers are considered for only the retail segments, the
growth is starker. Almost half of the Rs 5,000 crore-6,000 crore daily market volume on the NSE
accounted for by non-retail