Module-1: INTRODUCTION TO SALES MANAGEMENT

DEFINE SALES MANAGEMENT

“Sales management is the attainment (achievement)of sales force goals in an
effective and efficient manner through:
• Planning
• Staffing
• Training
• Leading
• Controlling organizational resources”
Sales management is defined as “the effective planning, directing and control of
personal selling, including recruiting, selecting, equipping, assigning, routing,
supervising, paying and motivating as these tasks apply to personal sales force.

WHAT IS PERSONAL SELLING?

Personal selling involves oral conversations, either by telephone or face-to-face,
between salespersons and prospective customers.
Contribution of personal selling
 Salespeople generate revenue
 Salespeople provide market research and customer feedback
 Salespeople provide solutions to problems
 Salespeople provide expertise and serve as information resources
 Salespeople serve as advocates for the customer when dealing with the
selling organization

EXPLAIN THE OBJECTIVES OF SALES MANAGEMENT

Sales s management entails numerous objectives which are executed by sales
managers.
There are mainly three such objectives
1. Sales Volume
2. Contribution to profits
3. Continuous Growth
Sales volume – Achieving sales volume is the first objective of Sales. The word
“volume” is critical because whenever a product sales start, the market is supposed
to be a virgin market. Thus there needs to be optimum penetration so that the
product reaches all corners of the region targeted. Ultimately, penetration levels can
be decided on the basis of sales volume achieved.
Contribution to profit –Sales brings turnover for the company and this turnover
results in profits. Naturally, sales has a major contribution to profit and it is
categorized as a profit function in several organizations. But there is one more
aspect to the contribution of profit by sales. The objective of sales management is to
sell the product at the optimum price. Some companies might target a premium
pricing for a product to make it premium in the market. But if the sales team drops
the price, then the objectives are not being met and the profit is dropping. This has
to be kept in check by seniors as price drops directly affect the margin of the
product
The other objectives functions of sales management are as follows
1. To achieve Sales Targets
2. To achieve Market share targets
3. To manage dealer network
4. To organize sales training
5. To handle customer complaints
6. To manage Sales promotion campaigns
7. To effectively cover market

EXPLAIN THE IMPORTANCE OF SALES MANAGEMENT

1. Allocating of salesforce and setting sales quota
2. Compensating, motivating and leading the salesforce.
3. Analyzing sales volume cost and profit
4. Measuring and evaluating salesforce performance.
5. Monitoring marketing environment
6. Improves Product Development
7. Optimizes Distribution
8. Better Financial Decisions
9. Improves Staff Quality
10.Introduction of new products in the market.
11. Increasing the production of existing products.
12.Reducing cost of sales and distribution.
13.Export market.
14. Development in the means and communication of transportation within and
outside the country.
15. Rise in per capita income and demand for more goods by the consumers.
16.To stimulate sales-effort.
17.To enforce proper supervision of sales-force.

Improves Product Development:A sales management program includes having

your sales staff keep in close touch with customers and watching the competition to
determine if your product line is as relevant as it can be. Adding a new product to
your line, changing or eliminating features or dropping items from your product mix
can all help you maximize your sales and profits. Conduct regular reviews of what
you sell to make sure you offer the optimal product or service to generate high sales
volumes and profit margins.
Optimizes Distribution:Sales reports not only provide you with information about
what’s selling and how much you’re selling, but where you are making your sales. A
sales management program evaluates your distribution methods and maximizes
their use. For example, if your online sales are strong but your retail volumes are
lagging, you might find this is because customers get more information when they
shop online, helping them buy with confidence. To improve retail sales, you might
provide better retailer training, more in-store promotions and change your product
packaging.
Better Financial Decisions: Some of your best-selling products, in terms of volume,
might provide your lowest profit margins, causing a burden on your production and
administration departments. Detailed sales reports provide you with information on
your overhead and production costs, cost-of-sales expenses and profit margins. A
low-margin item with high sales volumes might provide a nice profit margin,
making it a no-brainer item to keep in your line. If you can eliminate this item,
causing a corresponding increase in higher-margin item sales, you might want to
discontinue selling it. Sales management looks at the profit contribution,
opportunity cost and impact of carrying each product on your operations.
Improves Staff Quality: A sales plan is only as good as the people who use it, and a
key part of any sales management program is recruiting, training and managing
sales staff. This includes developing their product knowledge, coaching them on
calls, improving writing and presentation skills and helping them work their
territories effectively.

WHAT ARE THE SALES MANAGER QUALITIES

1. A GOOD ORGANIZER AND ADMINISTRATOR, ABLE to plan, implement and
monitor sales activity
2. INNOVATOR AND CREATOR OF NEW IDEAS AND PROMOTION
3. CONFIDENT & MOTIVATOR TO SALESMEN
4. A TEAM LEADER,
5. a GOOD COMMUNICATOR, with colleagues, subordinates, customers and trade
contacts at all levels
6. POSITIVE ATTITUDE.
7. INSPIRING COLLEAGUES AND SUBORDINATES with a sense of leadership,
direction and confidence
8. AN OPPORTUNIST AND A WORTHY ADVISOR
9. A TEAM-MATE AND REFEREE.
10. SUCCESSFUL MENTOR
Let us go through some qualities which a sales professional must have:
1. Patience
 A sales manager needs to be extremely patient. You just can’t afford to
be rude to your customers.
 Clients do need time to believe in you and trust your products. Don’t
get hyper and make the client’s life hell. Give him time to think and
decide.
2. People Oriented
 It is essential for a sales manager to be customer centric. Understand
customer’s needs and expectations. Don’t simply impose things on him.
 Individuals representing the sales vertical need to be caring and kind
towards customers.
 Don’t only think about your own targets and selfish interest’s. One
should never misguide the customers. Be honest with them. Avoid
telling lies and creating fake stories.
3. Aggressive
 A sales professional needs to be aggressive and energetic. Lazy
individuals don’t make great sales professionals.
4. Go-Getter Attitude
 It pays to be optimistic in sales. Sales professionals need to have a go-
getter attitude for the best results.
 It is really not necessary that all customers would like or need your
product. Don’t expect results every time. Remember failures are the
stepping stones to success. One must learn from his previous mistakes
and move on. Don’t take failures to heart.
5. Value Time
 People in sales must value time. Being late for meetings create a wrong
impression in the minds of customers.
 It is a sin to make customers waiting unless and until there is an
emergency. Start a little early and make sure you reach meetings on
time.
6. Sense of Commitment
 A sales representative who is committed towards his work manages to
do well and make his mark as compared to others. Commitment in fact
is essential in all areas of work.
 If you have promised someone to meet at 5pm, make sure you are
there at the desired venue at 4.45 pm sharp. Don’t make silly excuses.
Trust is lost when commitments are taken back. There should be no
turning back.
7. Reliable
 The customers must be able to depend on the sales professionals. A
sense of trust is important.
 8. Flexible
 A sales professional must know how to change his sales pitch as per the
client. Don’t just stick to one plan or one idea.
 Learn to take quick decisions as per the situation. Be adaptable to
changes. People in sales should not be too rigid and demanding.
9. Be Transparent
 Don’t hide things from the customers. Transparency is essential to
avoid problems later on.
 Convey only what your product offers.
10. Diligent
 Mere sitting at office does not help in sales. One needs to go out, meet
people and make prospective clients. Don’t complain if it is too hot or
cold outside.
 A sales professional ideally should spend his maximum time in field to
achieve targets in the best possible way.
11. Good Communicator
 A sales professional must be a good communicator for the desired
impact.
 Take care of your pitch and tone.

EXPLAIN THE EVOLUTION OF SALES MANAGEMENT

SIMPLE TRADE ERA

The beginning era identified as Simple Trade Era, lasted from the beginning of the
marketing concept to the mid 19th century.
In this period whatever products available were harvested with limited offerings.
Exploration and trade in resources was the focus of the economic activity with
products as center of attraction.

PRODUCTION ERA
In the next stage the simple trade era was replaced by the production era, continued
until the great depression. In this era importance was given on engineering and
production. The primary objective was to only produce product and sell it to the
market in assumption that customers have to accept it as alternatives were not
available.
1. The era of production orientation was characterised by focusing company
efforts on producing goods or services.
2. More specifically, management efforts were aimed at achieving high production
efficiency, often through the large-scale production of standardised items.
3. In this situation other functions such as sales, finance and personnel were
secondary to the main function of the business, which was to produce.
4. More importantly, the underlying philosophy was that customers would
purchase products, provided they were of reasonable quality, available in
sufficiently large quantities and at a suitably low price

THE SALES-ORIENTED ERA

 It is one where the focus of company effort switches to the sales
function. The main issue here is not how to produce but, having
products, how to ensure this production is sold.
 In any case, even those customers who are seeking to purchase the type of
product or
 service the company produces will have a wide range of potential suppliers.

MARKETING DEPARTMENT ERA.

During the post Second World War phase, World featured economic boom resulted
a urgent need of a separate department for marketing called as Marketing
Department Era.
 In some ways the central importance of the customer has perhaps
always been recognized in the long history of trading.
 The marketing concept holds that the key to successful and profitable
business rests with
 Identifying the needs and wants of customers and providing products and
services to satisfy them.
 Too many companies have learned the hard way that having what they feel to
be a superior product, efficient production and extensive promotion –
laudable though these may be – are not sufficient to confer automatic success.
  To have any chance of success, customer needs must be placed at the very
centre of business planning.
 In part, this stress on understanding the consumer explains the
development of those concepts and techniques aimed at understanding
buyer behaviour.
 Here organizations experienced that past sales orientation concept were not
sufficient to motivate consumers as they have more bargaining power in
market place. Business consolidated market related activities like
advertisement, sales promotion, public relation etc into a consolidated
department and concentrating on brand positioning.

Relationship marketing concept.

This sub-stage within marketing concept identified as the relationship marketing
concept. The goal of the organization is to build-up a long-term relationship with
customers. The general focus has changed to lifetime customer value and customer
loyalty. Customer relationship management and data-mining become the buzzwords
in recent marketing scenario.

Social/mobile marketing concept

The second sub-stage within the marketing concept is identified as social/mobile
marketing concept. It summed-up the knowledge and theories of its predecessor
era but focuses on real-time connections and social exchanges based on build-up
relationship driven by the consumers. In this concept businesses are connected
24/7 to current, future and potential consumers in real time.

MARKETING DEPT ERA

The sales era lasted between 1920’s and 1940’s, emphasized on different marketing
related aspects rather than product only.
As consumer markets were saturated and competitions were increasing day by day
so it was not easy to sell product without providing adequate information about the
brand. Here price became one of the most important features to organizations to get
an edge over their rivals.

EXPLAIN THE RESPONSIBILITIES OF SALES MANAGER

Responsibilities
1. Sales planning and budgeting
2. Estimating demand and forecasting of sales.
 3. Determination of size and structure of the sales organization.
4. Recruiting, selecting, and training of sale’s people
5. Studying marketing conditions
6. Managing sales promotion & advertising
7. Allocating of salesforce and setting sales quota
8. Compensating, motivating and leading the salesforce.
9. Analyzing sales volume cost and profit
10.Measuring and evaluating salesforce performance.
11.Monitoring marketing environment

EXPLAIN THE SKILLS OF SALES MANAGERS

1. People/Human Skills – ability to work with other people effectively & also
Motivate, lead, communicate and coordinate effectively with team building
2. Managing Skills – Administrative skills like – planning, organizing,
controlling and decision making

3. Technical skills –Must have knowledge, analytics ability,competet use of all

scientific tools & equipments & also Training, selling, negotiating, problem-
solving and CRM skills
4. Conceptual & decision skills: It involves managers thinking & planning
abilities

EXPLAIN THE EMERGING TRENDS IN SALES MANAGEMENT

To be successful in a changing market environment, it is important that sales
managers understand the importance of emerging trends in the following areas
1. Global Perspective
2. Technological Revolution
3. Customer Relationship Management [CRM]
4. Sales Force Diversity
5. Team Selling Approach
6. Managing Multi-Channels
7. Ethical and Social Issues
8. E-Selling

E-selling: it is known as electronic commerce which means buying and selling

online by using internet. A lot of companies are beginning to sell product and
services online. E-commerce are the part of e–marketing where promotion and
selling are done through the internet. It enables the co. To build relationships with
the target audience
Global Perspective: A company faces competition not only from domestic
companies but also from the companies abroad, sales management must meet
foreign competition. They must also improve personal selling efforts in other
countries. Companies selling goods and services in the global market, faces new
challenges due to differences in culture, languages, lifestyle etc. Sales mangers must
develop a global perspective
Global competition is intensifying. Domestic companies who never thought about
foreign competitors are suddenly finding them in their backyard. This is a challenge
which sales managers and salesperson must take on, they have to improve their
personal selling efforts not only in their countries but also in foreign countries.
Selling goods and services in global markets presents a challenge due to differences
in culture, language, needs and requirements.
Technological Revolution: In order to compete successfully, sales department
must adopt the latest technology. This technological innovation helps to increase the
efficiency and reduce the cost of sales efforts.
Digital revolution and management information system have greatly increased the
capabilities of consumers and marketing organizations. Consumer today can get
information about products, compare it with other brand, place an order and place
an order instantly over the internet. This has led to a different kind of sales force
who collects information about internet users, markets and prospects of internet
buyers. It is mandatory for all companies to have their website now.To compete
effectively, sales person and managers will have to adopt the latest technology.
Ex: For example, the banking industry has reduced the costof serving its customers
by using technologies such as automated teller machines(ATM’s), toll-free
callcenters, and the Web
Customer Relationship Management [CRM]
Information technology enables a company to provide excellent customer service,
by meeting the individual needs of each customer. Creating new customers is more
costly as compare to retaining them. Therefore, companies have started
“CRM”program's to expand their relationships with the customers. The challenge
before sales management is to identify the market segments who will respond to
CRM.
Combining information technology with relationship marketing has resulted in
customer relationship management. Interestingly, the concept of relationship
marketing came about earlier by bringing quality, customer service and marketing
together. Relationship marketing aims in building long term satisfying relations
with key customers distributors and suppliers in order to earn and retain their long
term preference and business. CRM enable companies to provide excellent real-time
service by focusing on meeting the individual needs of each valued customer,
through the use of CRM software packages.

Sales Force Diversity

The demographic characteristics of sales force is changing and becoming more
varied. For example, more and more women are taking up careers in sales
management and selling. Also the education level of sales people is going up most of
them holding a college degree or a post graduate degree. Sales managers now have
to handle a sales force of these varied demographic, expectations of each and every
individual is different and sales manager needs to use different motivational tools
against each one of them.

Team Selling Approach

The practice of team selling is more widely followed by most companies in recent
years.
Team selling is the useof teams made up of people from different functional areas to
service large accounts.. Increasingly, sales representatives who lack technical
expertise work as a team with a technical expert. In this arrangement, the duties of a
sales representative are to make the preliminary contact with customers, introduce
the company’s product, and close the sale. The technical expert will attend the sales
presentation to explain and answer questions and concerns.
Team selling approach is used when company wants to build a long term mutually
beneficial relationship with major customers, who have high sales and profitable
potential. It is used for selling a technically complex product or a service to a
potential customer. The composition of team may vary depending upon the
customer from top management, technical specialist, customer service, etc…

Managing Multi-Channels
Multi-channel marketing system occurs when organization uses two or more
marketing channels to target one or more customer segments. Major benefits of
multi-channel marketing system are:
 Lower channel cost
  Increased market coverage
 Customized selling
Multi-channel may also lead to conflicts and control problems, as two or more
channels may compete for same customer. A successful sales manager will have to
effectively manage conflict between the channels.

Ethical and Social Issues

Sales managers have ethical and social responsibilities. Sales people face ethical
issues such as bribery, deception (or 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’s sales managers have no choice but to
ensure ethical standards from sales force otherwise they may be out of business or
even land up in legal problems.

Sales Force Automation (SFA)

Applications of computer and other technologies to make the sales function more
efficient and competitive. Many salespeople need to go to the prospective customer
in order to demonstrate or illustrate the particulars about the product. Technology
makes salespeople more effective and productive because it allows them to provide
accurate and current information to customers during sales presentations.
Sales automation (also known as customer asset management and total
customer management) implies that technology can be used to speed up
previously inefficient operations. The Internet and related technology have affected
the personal selling process. Product information on Web sites is available to
customers and prospects. In the past, salespeople delivered this information to the
customer. The Internet frees salespeople to focus on the most important aspects of
their job (such as building long-term relationships with customers and focusing on
new accounts). Information is shared among users in every department that touches
the customer. Also, information sharing promotes more effective channel
partnership. Salespeople use computers (with communications devices, contact
management programs, and email) to connect them (over the Internet) to their own
company’s databases when they are out on sales calls. This gives them with the
ability to provide the customer with extensive, relevant information almost
immediately. Salespeople have access to current, relevant marketing materials,
including data sheets, brochures, multimedia presentations, and proposal templates,
online or via CD-ROM.
DEFINE PERSONAL SELLING
Personal selling is oral communication with potential buyers of a product with the
intention of making a sale. The personal selling may focus initially on developing a
relationship with the potential buyer, but will always ultimately end with an
attempt to "close the sale“.
Personal selling involves a 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
Definition: A form of person to person communication in which a salesperson
works with prospective buyer and attempts to influence purchase in the
direction of his or her company’s products or services
Some important aspects of Personal selling:
1. It provides human touch to business transaction.
2. It promotes long term business relationship.
3. It enhances customer confidence
4. It helps in understanding the pulse of the customer.
5. It helps in customizing the product.
6. Helps in convincing the customer about the product.

WHAT ARE PERSONAL SELLING OBJECTIVES

1. To “service” existing accounts (that is, to maintain contacts with present
customers, take orders, and so forth).
2. To search out and obtain new customers.
3. To secure and maintain customers’ cooperation in stocking and promoting the
product line.
4. To keep customers informed on changes in the product line and other aspects of
marketing strategy.
5. To assist customers in selling the product line
6. To provide technical advice and assistance to customers
7. To assist (or handle) the training of middlemen’s sales personnel.
8. To provide advice and assistance to middlemen on management problems.
9. To collect and report market information of interest and use to company
management.

EXPLAIN PERSONAL SELLING PROCESS OR STEPS

1. Prospecting:
Searching for prospects is prospecting. Here, prospect is a person or an institution
who is likely to be benefited by the product the salesman wants to sell and can
afford to buy it.
Prospecting is the work of collecting the names and addresses or persons who are
likely to buy the firm’s products and services. Provide encompasses even the
discovery of special needs and multiplying the sales with existing clientele.
While collecting the details, ‘suspects’ must be separated from ‘prospects’ to avoid
or reduce waste of time, treasure and talent. There are definite methods of
prospecting.

Pre-approach:
Having found out the prospective customers, the salesperson should collect some
important details about the prospects. For example, if the prospect is a company,
then he should know what the company needs, who takes purchase decisions and
who are its buyers.
After knowing the important particulars about the prospects, the salesperson
should set call objectives. The salesperson should qualify the prospect, collect
information and make an immediate sale. He should also decide on the best
approach which may be a personal visit, a phone call or a letter. Besides he should
also decide on the timing of approach, based on the convenience of the prospects

Approach:
Approach means the meeting of the prospect in person by the salesman where he
makes face to face contact with prospects to understand them better. He should
know how to greet the buyer before starting his conversation. The salesperson
should be properly dressed which coincides with the temperament of the buyer. The
opening line should be positive. Approach is such a delicate and critical stage of the
sales process that the sales are either won or lost.
The objectives of approach are: To help the salesman to make a favorable
impression;
 to amplify the detailed information obtained by the salesman at pre-approach
level;
 to convert the favorable attention of the prospect easily and smoothly into the
sales proposition.

Presentation and demonstration:

 Presentation implies an array and decoration of articles in the shop. It is the heart
of selling process. Effective presentation has the capacity to convince the customer
 of his sales proposition. It creates and holds the interest of customers towards the
products. It would be wrong to assume that all those who enter the shop do buy
the products.
 Normally, most of the prospects visit the shop to see prior to their decision to buy.
This casual visit can be a commitment visit provided products are displayed,
presented and demonstrated by the salesmen in an appealing manner.
Demonstration is a part of presentation because, more description is not enough.
 Demonstration is the crucial task of providing the proofs and providing the
statements about quality, utility, performance and service of a product by
evidences of experiment, operation or a test.
 The significance of demonstration lies in reducing the sales talk, facilitating the
comparison, appealing to senses, fortifying the sales talks and convincing the
fastidious customers. Here, A-I-D-A approach works wonders.

Handling Objections: The prospect is in fact requesting additional information to

help him to justify a decision to buy. The prospect may not be fully convinced and
the issues raised are thus very important. It also assists the salesperson to establish
exactly what is on the prospect's mind. Psychological resistance includes resistance
to interference, giving importance for well established brands, apathy, impatience,
reluctance to participate in the talk, unpleasant situation created by the salesperson,
aversion towards decision making, etc.
Logical resistance is based on some reasons associated with price, delivery
schedule; product or company characteristics, etc. Salesperson should overcome
these objections by adopting a positive approach. He must convert the objections
into reasons for buying. Handling and overcoming objections are the most
important part of sales process.

Closing::All the earlier stages of sales talk namely, prospecting, pre-approach;

approach, presentation and handling the objections have been designed to induce
the prospect to make decision to buy so that a sale can be concluded.
The success in earlier stages will lead to the last stage of closing the sale and clinch
the deal. Here, ‘close’ means the act of actually getting the prospect’s assent to the
sales proposal or he gets an order.
The underlying point of closing sale is to persuade the prospect to act right now
than postponing or delaying the action. It is here that the prospect is turned into a
customer desire into demand.
Though it sounds very easy, it is the most difficult task. It is the positive attitude and
self-confidence that plays a decisive role in converting wish into desire and desire
into demand. A poor closer is a poor salesman and salesman who cannot close well
will have to close the line.

Follow-up and maintenance:

Immediately after closing the sale, the salesperson should take some follow up
measures. He may give details about delivery time, purchase terms and mode of
payment of price, etc. The salesperson can ensure customer satisfaction by properly
attending matters which are important to the customers. Thus, follow up is
necessary if the salesperson wants to ensure repeat purchase.

EXPLAIN TYPES OF SALES ORGANIZATION

LINE SALES ORGANISATION
1. The line sales organization is the most basic forms of sales organization,
characterized by a chain of command running from the top sales executive down
to the level of the salesman.
2. It is the oldest and simplest sales organizational structure. It is widely used in
smaller firms and in firms with small numbers of selling personnel.
3. For instance, in companies that cover a limited geographic area or sell a narrow
product line.
4. The chain of command runs from the top sales executives down through
subordinates. All executives exercise line authority, and each subordinate is
responsible only to one person on the next higher level.
5. Responsibility is definitely fixed, and those charged with it also make decisions
and take action. Lines of authority run vertically through the structure. And all
persons on any one organizational level area independent of that level.
6. The line sales organization sees its greatest use in companies where all sales
personnel report directly to the chief sales executive.
7. In these companies this executive often is preoccupied with active supervision
and seldom has much time to devote to planning or to work with other top
executives.

Advantages:
 Problems of discipline & control are small
 Authority & responsibility are clear
 Saves time in making policy changes
 Development of close relationship between superior & subordinate
  Administrative expenses are low
Disadvantages
 Too much dependence on department head
 Insufficient time for policy making & planning
 Inappropriate for rapidly growing firms
 Offers little opportunity to subordinates to acquire management skills

LINE AND STAFF SALES ORGANISATION:

1. Line and staff sales organization is often found in large and medium sized firms,
employing substantial numbers of sales personnel, and selling diversified product
lines over wide geographic areas.
2. Line and staff organizations usually result as the size of the operations grows. It
is characteristically found in medium and large firms which sizeable sales staff
selling diversified product lines.
3. The line and staff department is differentiated by the presence to staff specialists
of staff assistants to advise and assist the top sales executive.
4. These specialists are experts in their own fields which could be sales training,
service, sales analysis and planning, dealer relations, sales promotion, sales
personnel development and so on.
5. While staff executives and assistants do not have the line authority to command,
they advise the line executives through recommendations and provide the benefit
of specialization in the organization.
6. Staff manager don’t have any authority to issue directives to salespeople, who
report to line sales managers.
7. For example, staffs members may be authorized to deal directly with line
executive’s regarding execution of plans and implementation of policies
developed by the staff and approved by management. Although staff members act
on behalf of line sales executives in these instances, they assume joint
responsibility for results.

Demerits
1. The problem that arises with line and staff organization is basically one of the
coordination.
2. The work of the staff specialists needs to be actively coordinated with the
operations of the line department and generally a lag develops, as reports and
recommendations take time to compile.
3. Line and Staff organization also sometimes generates problems of interpersonal
relations.
4. The staff executives tend to overstep their advisory authority and try to assume
and sometimes succeed in assuming the authority to issue orders and directions.
5. This presents difficulties of dual subordination and may create confusion.
6. The fact that staff specialists do not share direct responsibility for results is also
resented by some line executives.
7. Experience has shown that to a large extent these problems can be minimized if
all areas in which line and staff executives have to share authority and
responsibility are specifically written down as components of the job description

FUNCTIONAL SALES ORGANISATION:

1. Some sales departments use Functional sales organization.
2. This type is based upon the premise that each individual in an organization,
executive and employee, should have as few distinct duties as possible.
3. The principle of specialization is utilized to the fullest extent.
4. Duty assignments and delegation of authority are made according to function.
5. In case of functional type of organization it is classified and divided and sub
divided on the basis of functions to be performed.
6. In contrast to the line and staff organization, all specialists in a functional
organization have line authority of a sort or, more properly, they have
function authority.
7. Instructions, and even polices, can be put into effect with or without prior
approval of the top level coordinating executive.
 MERITS
1. Specialization at different levels.
2. Flexibility of increasing and decreasing of departments as per needs.
3. Quick decision making.
4. Easy co-ordination between sub functions.
DEMERITS:
1. Products do not get due attention.
2. Delay because of sub division of departments.
3. Problem of co-ordination due to increased responsibility of general manager.
4. Conflicts between departments.
5. Effectiveness of organization is badly affected due to malfunctioning of
departments.

WHAT ARE THE FUNCTIONS OF SALES MANAGEMENT

PLANNING
A business cannot be taken as a chance. Every salespeople or person concerned
have to see for the future, in a planned way like what must be done? And who will
do it?
The plan must be based on extensive market research, and the facts must be verified
at every stage. The plan should also be evaluated, after investigating the total-
market, for a particular type of product.
Flexibility must be provided by establishing a specialist’s production line, to allow
for variation in production.
The plan should also be subject to continued review. The details of the plan should
be discussed, with all the departmental heads, concerned, and their sub-ordinates,
who bear responsibility for fulfilling their parts of the plan.
COORDINATION:
1. Co-ordination also helps in maximum utilization of human-effort by the exercise
of effective leadership, guidance, motivation, supervision, communication etc.
2. The control-system also needs co-ordination. Co-ordination does not have any
special techniques.
3. Nevertheless, there are sound principles, on which to develop skills. It has a
special need to help the staff, to see the total picture and co-ordinate their
activities, with the rest of the team.
4. The sales manager has to encourage direct personal-contact, within the
organization, particularly where there is lateral-leadership.
CONTROLLING:
1. The sales manager has to check regularly, that the sales activities are
moving in the right direction or not.
2. He guides, leads, and motivates the subordinates, so as to achieve the
goals planned for the business.
3. He has to take steps to ensure that the activities of the people conform
to the plans and objectives of the organization.
4. The controlling system should be such that one can study the past, note the
pitfalls and take corrective measures, so that similar problems may
not occur in the future.
There must be procedures to bring to light the failure to attain a target. The control-
system has to
 Achieving sales volume
 forecasting potential sales volumes and prices
 identifying, setting, and achieving sales
 objectives, targets, budgets and profit
 plans
 Call coverage
 Sales recruitment & selection
 Trade terms
 Order processing
 Provision of feedback
 Maintaining activity records
 Prepare sales and market forecasts;
 determine the level of sales-budget;
 sales-quotas for each salesman;
 determine, review and select distribution-channels;
 organize an efficient sales force;
 establish a system of sales-reporting;
 establish a system of statistical sales-credit;
 establish stock-control system(s);
 review of performance of the sales- force; and
 Establish periodical testing programmers.
 Mgmt is profit oriented
Marketing starts with the buyer and focuses constantly on
the needs of the buyer
Emphasizes on identification of market opportunity
Seeks to convert customer needs in to products
Views business as – a customer satisfying process
Marketing views the customer as the very purpose of
business
Planning is long term

EXPLAIN THE THEORIES OF SELLING

1.“AIDAS” theory
2.“Right set of circumstances” theory
3.“Buying-formula” theory
4.“Behavioural equation” theory.
1.“AIDAS” theory
AIDAS theory, after the initials of the five words used to express it (attention,
interest, desire, action and satisfaction). During the successful selling interview,
according to this theory, the prospects mind passes through five successive mental
states: Attention, Interest, Desire, Action and Satisfaction consciously, so the
presentation must lead the prospect through them in the right sequence if a sale is
to result.
Securing Attention: The main aim is to put the prospect into a receptive state of
mind so that the prospect pay attention to the presentation. The sales person must
establish good rapport at once. Favourable first impressions are to be assured in
first step.
•Gaining Interest: The second goal is to intensify the prospect’s attention so that it
evolves into strong interest. Many techniques are used to gain interest such as
showing visual aids, flipcharts, technical aids etc.
Desire: The third goal is to kindle the prospect’s desire to the ready- to – buy point.
The sales person must keep the conversation running along the main line toward
the sale. The objections to be handled carefully and the desire of the buyer to be
aroused.
•Inducing Actions: The presentation may arouse strong desire in the buyer’s mind
to buy but the sales person must induce the prospect to act – that the prospect to
buy as buying is not automatic. The sales person will try to find out the right time to
close the sale with the positive action from the buyer’s agreement to buy.
Building Satisfaction: After the customer has given the order, the sales person
should reassure the customer that the decision was correct. The sales person should
left an impression in the buyer’s mind that he mere helped the buyer to decide to
buy.
2. “Right Set Circumstances” Theory of Selling
This theory sometimes called “Situation-Response” theory and it emphasizes on
creating a right circumstance or situation by the sales person so that he succeeds in
securing the attention and gaining the interest of the prospect, and if the sales
person presents the proper stimuli or appeals, the desired response (that is the
sale) will result.
This is a seller-oriented theory and stresses upon the sales person controlling the
situation.
3. “Buying Formula” Theory of Selling
The buyer’s needs or problems receive major attention, and the sales person’s role
is to help the buyer to find solutions. This theory treats the job of a sales person as
problem solving. The purchase must solve buyer’s problem and when the purchase
gives satisfaction the buyer-seller relationship will continue.
To ensure purchase, the product or service and the trade name (that the source of
supply must be considered adequate, and the buyer must experience a (pleasant)
feeling of anticipated satisfaction when thinking of the product and/or service
and/or the trade name.

4.“ Behavioural Equation” Theory of Selling

J.A Howard explains buying behavior in terms of the purchasing decision process ,
viewed as phases of the learning process. Four essential elements of the learning
process included in the stimulus-response model are drive, cue, response and
reinforcement, described as follows:
1.Drives : are strong internal stimuli that impel the buyer’s response, and are of two
kinds:
a)Innate drives: stem from the physiological needs, such as hunger, thirst, pain,
cold and sex.
b)Learned drives: such as striving for status or social approval, are acquired when
paired with satisfying of innate drives, in marketing the learned drives are dominant
in economically advanced societies.

2.Cues: are weak stimuli that determine when the buyer will respond.
(i) Product cues: are external stimuli received from the product directly, for
example colour of the package, weight, or price.
(ii) Informational cues: are external stimuli that provide information of a symbolic
nature about the product. Such stimuli may come from advertising, conversation
with other people (including sales personnel) and so on.

3.Reinforcement & response

EXPLAIN THE OBJECTIVES OF PERSONAL SELLING

 Building Product Awareness – A common task of salespeople, especially

when selling in business markets, is to educate customers on new product
offerings. In fact, salespeople serve a major role at industry trades shows (see
the Sales Promotion tutorial) where they discuss products with show attendees.
But building awareness using personal selling is also important in consumer
markets. As we will discuss, the advent of controlled word-of-mouth marketing
is leading to personal selling becoming a useful mechanism for introducing
consumers to new products.
 Creating Interest – The fact that personal selling involves person-to-person
communication makes it a natural method for getting customers to experience a
product for the first time. In fact, creating interest goes hand-in-hand with
building product awareness as sales professionals can often accomplish both
objectives during the first encounter with a potential customer.
 Providing Information – When salespeople engage customers a large part of
the conversation focuses on product information. Marketing organizations
provide their sales staff with large amounts of sales support including brochures,
research reports, computer programs and many other forms of informational
material.
 Stimulating Demand – By far, the most important objective of personal
selling is to convince customers to make a purchase. In The Selling
Process tutorial we will see how salespeople accomplish this when we offer
detailed coverage of the selling process used to gain customer orders.
 Reinforcing the Brand – Most personal selling is intended to build long-term
relationships with customers. A strong relationship can only be built over time
and requires regular communication with a customer. Meeting with customers
on a regular basis allows salespeople to repeatedly discuss their company’s
products and by doing so helps strengthen customers’ knowledge of what the
company has to offer.

Explain the Factors Affecting the Size / Structure of Sales Organization

1. Nature of the product: nature of the product plays an important role in
determining the structure of sales organization.
2. Area of Operation / Market Area: if the product is sold locally, sales
organization will be small. And if the market is large the organization will be
large
3. Size of the Enterprise: Large enterprises have large sales organization e.g.
Reliance telecom has large sales org.
4. Number of products: If the enterprise is dealing with large number of products,
it needs large sales organization. E.g. Hindustan levers is selling many products
like Lipton tea , lux soap , lifebuoy soap, while company which is selling few
products will have small sales organization
5. Distribution policy:Different companies follow different different distribution
policies for their products directly to the customers opening their own shop or
through their personal selling.
6. Level of competition: if the level competition is high in the market , many
salesman have appointed to attract the customers so the size of the sales
organization becomes large
7. Tradition and customs: Tradition and customs prevailing in similar types of
business units also affects the structure of sales organization. When the new
business is set up, then while deciding structure of the organization we
should consider the prevailing traditions and form of sales organizational structure
of sales organization. When a new business is set up, then while deciding
structure of sales organization structure of existing business unit in the same
industry in the same geographical locations.
8. Sales policies: if the business unit adopts the aggressive sales policy then it will
require more salesmenfor achieving higher sales level. The business units who
sell goods on credit, installment system, hire purchases system will have to
employee more salesmen for collecting dues, installments from customers.
9. Ability of Top-officials: If top-officials of the institute are highly educated,
experienced, skilled, efficient, and then business unit can adopt line sales
organization, because these experienced officers can take necessary decisions
without the help of experts.

DEFINE SALE ORGANIZATION & LIST OUT THE FACTORS AFFECTING SALES
ORGANISATION
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
1. Product and service related factors
2. Organization related factors
3. Marketing mix related factors
4. External factors

WHAT ARE ROLES & RESPONSIBILITIES OF SALES MANAGEMENT OR

MANAGER.
1. Sales planning and budgeting
2. Estimating demand and forecasting of sales.
3. Determination of size and structure of the sales organization.
4. Recruiting, selecting, and training of sale¡¦s people
5. Allocating of sales force and setting sales quota
6. Compensating, motivating and leading the sales force.
7. Analyzing sales volume cost and profit
8. Measuring and evaluating sales force performance.
9. Monitoring marketing environment.