You are on page 1of 63

INTRODUCTION TO

SALES MANAGEMENT
Part I
SALES MANAGEMENT:

It has been defined as the management of a firm’s


personal selling function while distribution is the
management of the indirect selling effort i.e.selling
through extra corporate organizations which form
the distribution network of the firm. The sales
management task thus includes analysis, planning,
organizing, directing and controlling of the
company’s sales effort.
Sales Management
• Sales management, apart, from the management of
personal selling, encompasses marketing activities like
advertising, sales promotion, marketing research,
physical distribution, pricing, merchandising and so on.
Sales management is defined by the
• American Marketing Association (AMA) as: ‘The
planning, direction and control of personal selling,
including recruiting, selecting, equipping, assigning,
routing, supervising, paying and motivating as these
tasks, apply to the personal sales force’.
• Sales volume, contribution to profits and growth are
the three major objectives of the sales function.
DISTRIBUTION MANAGEMENT

• Distribution (or place) is one of the four elements


of marketing mix. An organization or set of
organizations (go-betweens) involved in the
process of making a product or service available
for use or consumption by a consumer or
business user.
• Distribution Management comprises
management of channel institutions as well as
physical distribution functions.
EXCHANGE PROCESS

• It is the sale and delivery of goods/services


from the manufacturer to the consumer can
be consummated directly i.e. by the firm itself
through its own sales force or indirectly
through a network of middleman such as
wholesalers and retailers.
Essential tasks need to be performed
in order to consummate successful exchange

• Contact- finding and communicating with prospective buyer


• Prospecting- Bringing together the marketers offering and the
prospective buyer
• Negotiation- Reaching an agreement on price and other terms
of the offer so that ownership and possession can be
transferred.
• Promotion- Of the marketers offerings, and his satisfaction
generating potential
• Physical distribution- Actual transfer of possession
• Collection- Of relevant consumers information and revenue in
exchange of goods or services
Interdependence of Sales
and Distribution
• All organizations use their own sales force or distribution
network to reach out to their customers.Activities of the
sales organization would have to be coordinated with
channel operations if sales goals have to be effectively
realized.
• The decision of the organization to allocate certain
responsibility in the exchange process to its channel
members would define the scope of responsibility of its own
sales force and thereby would determine the type of
personnel and training required.
Interdependence of Sales
and Distribution

• Even though, an organization may decide to deal directly


with its wholesaler, semi wholesaler, retailer or
consumer,it is required to decide upon the type of help it
will provide to the first and subsequent level of
intermediaries.
• The choice before an organization to have direct
distribution, indirect distribution or a combination of the
two is of strategic importance and depends upon factors
such as the degree of control, flexibility, costs and financial
requirements etc.The scope of distribution would define
that of the other.
Interdependence of Sales
and Distribution

• To implement overall marketing strategy, the


manufacturers need the cooperation of distribution outlets
in terms of adequate stock maintenance, in-store displays,
local advertising, point of purchase promotion.Within the
corporation, the sales organization is the initiator as well as
the implementer of these dealer support operations.This
would mean that the sales management has the
responsibility of structuring organizational relationship
within their own department and with interacting
organizational entities.
Key decision areas in
Sales Management relevant to
strategy formulation

• Deciding upon type and • Compensation of sales


quality of sales personnel force
required
• Performance appraisal
• Determination of the size
of the sales force • Feedback mechanism
• Organization and design of • Managing channel
the sales department relationship
• Territory design • Coordination with other
Marketing department
• Recruitment & training
procedures
• Task allocation
Framework for joint decision making
in sales and distribution management

Achievement of sales
Distribution channels
Goals through
Company’s sales force

Personal & Distribution channels


Prospecting
through Company’s sales force

Distribution channels
Personal & Non-personal
Promotion through Company’s sales force
Framework for joint decision making
in sales and distribution management

Maintaining
Distribution channels
Inventory through
Corporate organization

Accounts Distribution channels


Receivables
through
Corporate sales organization

Distribution channels
Information feedback
through Company’s own sales force
Examples of Personal Selling

Retail selling

Field selling

Telemarketing
Relative Importance of Advertising and
Personal Selling
Pre Transaction
Create Recognition and
Understanding Post Transaction :
Reminder and
Assurance
Personal
selling Personal
Transaction : selling
Advertising
Persuasion
Advertising
Personal
selling Advertising
Characteristics of Personal Selling
Pro
Con
Flexibility
• Adapt to situations  Can not reach mass
• Engage in dialog audience
 Expensive per contact
 Numerous calls
Builds Relationships
• Long term
needed to generate
• Assure buyers receive sale
appropriate services  Labor intensive
• Solves customer’s
problems
FOLLOWING UP

CLOSING THE SALE

HANDLING OBJECTIONS

MAKING THE SALES PRESENTATION

APPROACHING THE PROSPECT

Pre approach: QUALIFYING PROSPECTS

PROSPECTING: IDENTIFYING POTENTIAL CUSTOMERS

The Personal Selling Process


SCOPE AND SIGNIFICANCE OF
PERSONAL SELLING AND SALES
MANAGEMENT
• Nature of Personal Selling and Sales
Management
• Pervasiveness of Selling
• Personal Selling in Marketing
• Creating Customer Value through Salespeople:
Relationship and Partnership Selling
Personal selling

Personal selling involves the two-way flow of


communication between a buyer and seller, often in a
face-to-face encounter, designed to influence a person's
group's purchase decision.
Sales management

Sales management involves planning the selling program


and implementing and controlling the personal selling
effort of the firm.
THE MANY FORMS
OF PERSONAL SELLING
• Order Taking
• Order Getting
• Customer Sales Support Personnel
‣ Missionary salespeople
• Sales engineer
• Team selling
How outside order-getting salespeople spend their time each
week
What is the principal difference between an order taker and
an order getter?
An order taker processes routine orders or reorders for products
that were already sold by the company. Like order takers, order
getters can be inside (an automobile salesperson) or outside (a
Xerox salesperson). An order getter sells in a conventional sense
and identifies prospective customers, provides them with
information, persuades customers to buy, closes the sales, and
does follow-up on their use of the product or service.
TEAM selling

Team selling is the practice of using an entire team of


professionals in selling to and servicing major customers.
THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS

• Prospecting
• Pre-approach
• Approach
THE PERSONAL SELLING PROCESS: BUILDING
RELATIONSHIPS
• Presentation
– Stimulus-Response Presentation
– Formula Selling Presentation
– Need-Satisfaction Presentation
• Adaptive selling
• Consultative selling
– Handling Objections
• Close
• Follow-Up
Stages and
objectives of the
personal selling
process
Six stages in the personal selling process

The six stage of personal selling are:


(1) Prospecting,
(2) (2) Pre-approach,
(3) (3) Approach,
(4) (4) Presentation,
(5) (5) Close, and
(6) (6) Follow-up
What is the distinction between a lead and a qualified
prospect?

A lead is the name of a person who may be a possible


customer. A qualified prospect is an individual is a
customer who wants the product, can afford to buy it,
and is the decision maker.
The sales management process
• Sales Plan Formulation: Setting Direction
– Setting Objectives
– Organizing the Salesforce
• Major Account Management
• Workload method
– Developing Account Management
Policies
Organizing the sales
force by customer,
product, and geography
Account management policy grid
• Sales Plan Implementation: Putting the Plan
into Action
– Salesforce Recruitment and Selection
• Emotional intelligence
– Sales force Training
– Salesforce Motivation and Compensation
THE SALES MANAGEMENT PROCESS

• Salesforce Evaluation and Control


– Quantitative Assessments
• Sales quota
– Behavioural Evaluation
• Technology and the Salesforce
– Salesforce Automation (SFA)
What are the three types of selling objectives?
The three types of selling objectives are:
(1) Output - focus on dollar or unit sales volume,
(2) Input - emphasize the number of sales calls and
selling expenses, and
(3) Behaviour - specific for each salesperson and includes
his or her product knowledge, customer service,
selling and communication skills.
What three factors are used to structure sales
organizations?

The three factors used to structure sales organizations are:


(1) Should the company use its own salesforce, or should it
use independent agents?

(2) If the decision is made to employ company salespeople,


then should they be organized according to geography,
customer type, or product or service?

And (3) How many company salespeople should be


employed?
Personal Selling
• The two-way flow of communication between
a buyer and seller, often in a face-to-face
encounter, designed to influence a person’s or
group’s purchase decision.
Sales Management
• Planning the personal selling program and
implementing and controlling the personal
selling effort of the firm.
Relationship Selling
• The practice of building ties to customers
based on a salesperson’s attention and
commitment to customer needs over time.
Partnership Selling
• The practice whereby buyers and sellers
combine their expertise and resources to crate
customized solutions; commit to joint
planning; and share customer, competitive,
and company information for their mutual
benefit, and ultimately the customer.
Order Taker
• Processes routine orders or reorders for
products that were already sold by the
company.
Order Getter
• A salesperson who sells in a conventional
sense and identifies prospective customers,
provides customers with information,
persuades customers to buy, closes sales, and
follows up on customers’ use of a product or
service.
Missionary Salespeople
• Sales support personnel who do not directly
solicit orders but rather concentrate on
performing promotional activities and
introducing new products.
Sales Engineer
• A salesperson who specializes in identifying,
analysing, and solving customer problems and
who brings know-how and technical expertise
to the selling situations, but does not actually
sell goods and services.
Team Selling
• Using an entire team of professionals in selling
to and servicing major customers.
Personal Selling Process
• Sales activities occurring before and after the
sales itself, consisting of six stages: (1)
prospecting, (2) pre-approach, (3) approach,
(4) presentation, (5) close, and (6) follow-up.
Stimulus-Response Presentation
• A selling format that assumes the prospect will
buy if given the appropriate stimulus by a
salesperson.
Formula Selling Presentation
• Providing information in an accurate,
thorough, and step-by-step manner to inform
the prospect.
Need-Satisfaction Presentation
• A selling format that emphasizes probing and
listening by the salesperson to identify needs
and interests of prospective buyers.
Adaptive Selling
• A need-satisfaction sales presentation that
involves adjusting the presentation to fit the
selling situation.
Consultative Selling
• Focuses on problem definition, where the
salesperson serves as an expert on problem
recognition and resolution.
Sales Plan
• A statement describing what is to be achieved
and where and how the selling effort of
salespeople is to be deployed.
Major Account Management
• The practice of using team selling to focus on
important customers so as to build mutually
beneficial, long-term, co-operative
relationships.
Workload Method
• A formula-based method for determining the
size of a salesforce that integrates the number
of customers served, call frequency, call
length, and available selling time to arrive at a
sales force.
Account Management Policies
• Policies that specify whom salespeople should
contact, what kinds of selling an customer
service activities should be engaged in, and
how these activities should be carried out.
Emotional Intelligence
• The ability to understand one’s own emotions
and the emotions of people with whom one
interacts on a daily basis.
Salesforce Automation
• The use of technology to make the sales
function more effective and efficient.
Sales Quota
• Contains specific goals assigned to a
salesperson, sales team, branch sales office, or
sales district for a stated time period.
Managing the Sales Force
• Designing Sales Force Strategy and Structure
– Sales Force Structure
• Territorial sales force structure
• Product sales force structure
• Customer sales force structure
• Complex sales force structure
Managing the Sales Force
• Sales Force Strategy and Structure
– Sales Force Size
• Many companies use the workload
approach to set sales force size
– Other Issues
• Outside and inside sales forces
• Team selling
Managing the Sales Force
• Recruiting and Selecting Salespeople
– Careful recruiting can:
• Increase overall sales force performance
• Reduce turnover
• Reduce recruiting and training costs
• Traits of Successful Salespeople
– Intrinsic motivation
– Disciplined work style
– The ability to close a sale
– Ability to build relationships with customers
Managing the Sales Force
• Training Salespeople
– Training period can be anywhere from a few
weeks to a year or more
– Training is expensive, but yields strong returns
– Many companies are adding Web-based sales
training programs
Managing the Sales Force
• Training Salespeople
– Training programs have many goals
• Identify with the company and its products
• Know about customers and competitors
• The basics of the selling process