Sales & Logistics Management

Dr. Karpagam
Director – Academics
ISBR Business School
Bangalore
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Sales management

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 Chapter outline

• Objectives of Sales Management

• Personal selling process
• Developing personal selling strategies
– Pure competition
– Monopolistic competition
– Oligopolistic competition
– No direct competition

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 Chapter outline

• Types of sales organization

– Line sales organization
– Line and staff sales organization
– Functional sales organization
– Committee sales organization

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 Chapter outline

• Determining the kind of sales personnel

– Product market analysis
– Analysis of salesperson’s role in securing orders
– Choice of basic selling style
• Determining the size of sales force
– Work load method
– Sales potential method
– Incremental method
• Qualities of a sales execuitve

Dr. Karpagam 5
 Learning objectives

After reading this chapter, you will be in a position to

understand
What are the objectives of sales management ?
How a personal selling takes place ?
How to develop personal selling strategies ?
What are the ways to organize the sales force ?
Identify the different types of sales organization
Steps involved in determining the kind and types
of sales force
 qualities of sales executives

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Evoltion of sales function – pre sales era

Demand > Supply

Buyer Seek Sellers

Manufacturing had Higher

Importance

No Mass Production
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Evolution of sales management (Post
Industrial era)

Mass Production Commenced

New Markets to be found

Specialized Departments for

Personal Selling

Competition Forced it
further 8
 How marketing function got split ?

MARKETING

Sales Market Credit/ Traffic /

Research Collection Shipping

Advertising Sales Export Merchandis

Promotion sing

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 Steps in personal selling process

Prospecting
Pre-
& Approach
Approach
Qualifying

Handling
Closing Presentation
objection

Follow-up

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 Prospecting & Qualifying

• Prospecting
– Customers, suppliers, dealers, internet
• Qualifying (Screening out poor one by looking at)
– Financial Ability
– Volume of business
– Needs
– Location
– Growth potential

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 Pre-Approach

objectives Approaches
• Qualifying the prospect • Personal Visit
• Gather Information • Phone call
• Make an immediate sale • Letter

Approach Involves
1. Appearance
2. Opening Lines
3. Follow-up Remarks

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 Presentation

• Need Satisfaction Approach

– Buyers Want Solutions
– Salespeople should listen & respond with the right products
& Services to solve customer problems
• Buyers dislike salespeople that are
– Pushy, late, deceitful, disorganized, unprepared
• Buyers appreciate people that are
– Good listeners, Empathetic, Honest, Dependable, Through,
Follow-up types

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 Handling objections

• It is the process where salesperson resolve problems

that are
– logical, psychological (or) Unspoken

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 closing

• It is the process where salespeople should recognize

signals from the buyer, including
– Physical actions
– Comments &
– Questions to close the sale

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 Closing

• Closing technique
– Asking for the order
– Reviewing points of agreement
– Offering to help write up the order
– Asking if the buyer wants this model or another one
– Making note that the buyer will lose out if the order is not
placed
– Offering incentives to buy, including lower price (or)
additional quantity

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 Competitive strategy and personal selling
strategy
• Industries differ as to maturity and the number of
competitors
1. Pure competition
2. Monopolistic competition
3. Oligopolistic competition
4. No direct competition

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 Pure competition
• Assumptions :
1. No single buyer or seller is so large relative to the market
2. All seller’s product are identical (Buyers are indifferent)
3. No artificial restraints on price exist
a) Governmental price fixing
b) Administering of prices by individual companies, trade
associations, labour unions
4. All buyers are always informed about all seller’s price
• Important Assumptions :
– Sellers and buyers are in direct contact, making it
unnecessary to worry about marketing channels or physical
distribution
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 2. Monopolistic competition

• It Exists when
– Large numbers of sellers of a generic kind of product
– But each seller’s brand is in some way differentiated from
every other brand
– It is easy for additional competitors to enter the market
• Private label competitors
• Sellers differentiate their market offering through
– Individualizing one or several components of overall
marketing strategy

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 Cont’d..

• Unique packaging may differentiate the product

• Unusual distribution method (Such as house to house
selling)
• Pricing gimmicks (Psychological pricing)
• In Market-growth and market-maturity stages ,
seller can differentiate it through promotional
strategy
• Personal selling ensures the desired distribution
intensity is secured and maintained
– Middlemen provide the needed push

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 3. Oligopolistic competition

• Competitive Setting where

– The number of competitors is small enough that they are
individually identified
– Known to each other
– Difficult for new competitors to enter
• Each organization is large enough with large enough
market share
• Develops in
– Marketing many products either during a late phase of their
market growth
– An early phase of market maturity

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 Cont’d..

• Competitive moves of one affects the entire market

• Changes in
– Competitor’s product
– In its distribution
– In its promotion
• Encountered by competitors and launch counter
offensives
• Personal Selling Strategy :
– Building and maintaining dealer cooperation
– Servicing the distribution network

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 No direct competition

• Neither the monopolist nor Innovative marketer

• Both have indirect competitors
 Monopolist – on a long term basis
 Innovative Marketer – limited period
 Initiate and stimulate primary demand
 Through personal selling and advertising
 Distribution strategies
 Pricing strategies
 Monopolist – charging what the traffic will bear
 Innovative marketer – Price Skimming or a penetration
pricing

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 Determining the kind of sales personnel

• Understand what is expected of them

1. The Job objectives
2. The duties and responsibilities
3. The performance measures
• Qualitative personal selling objectives have some
degree of distinctiveness
– What it sells ?
– Whom it sells to ?
– Its pricing strategy and competitive setting

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 Cont’d….

• It is common for different salesperson in the same

company to have quite different jobs
• This can be done by
1. Product Market Analysis
2. Choice of Basic Selling Style

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 Product Market Analysis

• All kinds of products can’t be sold to all kinds of

customer
• Salesperson sells
1. Single products to many kinds of customers
2. Wide line products to a single kind of customers
3. Sell some products to some kinds of customers
• One way of categorizing selling jobs
1. Product Specialist
2. Market Specialist
3. Combination of product and market specialization

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Types and amount of specialization in selling
organizations

Between Between
Dominant Customers Products
Expertise

Product Full Line

Product Salespersons
Specialist (Supported by
Technologies
Product
Managers

Customer Full Line

Customers Specialist salespersons
Applications (Supported by specialized by kind
Market Managers) of customers

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 Choice of basic selling style

1. Trade Selling
2. Missionary Selling
3. Technical selling
4. Non-Business Selling

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 Role of advertising and personal selling

Advertising Personal Selling

• Servicing the distribution
• Relating market network
messages to final • Stimulating promotional
buyers efforts by the middlemen

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 Setting up a sales organization

1. Defining the objectives

2. Delineating the necessary activities
3. Grouping activities into “jobs” or “positions”
4. Assigning personnel to positions
5. Providing for coordination and control

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 Basic types of organizational structures

1. Line sales organization

2. Line and staff organization
3. Functional sales organization
4. Committee sales organization

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 1. Line sales organization

• Widely used in smaller firms

• Chain of command runs from top sales executive
down through subordinates
• All executives exercise authority
• Each subordinate is responsible only to one person
• Authority is definitely fixed
• Sees its greatest use – sales executives- directly
reports to CEO
• Preoccupied with active supervision
• More than two layers are present –occassionaly
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 Cont’d..
• Advantages
1. Reports to only one
person
2. Problem of discipline
and control are small
3. Lines of authority and
responsibility are clear
4. Simplicity
5. Frequently strong
leaders
6. Administrative expenses
are low
• Disadvantages
1. Much depends upon the
department head
2. Head should be a all-
rounder
3. Insufficient time for
policy making and
planning
4. Often make decisions
and take action without
benefit of planning
5. Results are often
disappointing
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 2. Line and staff sales organization

• Often found in large and medium based enterprise

• Selling diversified product lines
• Provides the top sales executives with a group of
specialist expert
– Dealers, distributor relations, sales analysis, traffic and
warehousing
• Conserves top executives and frees them from
excessively detailed work
• Delegating problems to staff executives – Top exe-
higher priority matters.

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 Line and staff sales organization
Advantages
1. Pool of experts provide
advice
2. Apparently unrelated
problems are brought into
focus
3. Concentrate on control and
coordination of subordinates
4. Staff assume much of the
burden of solving problems in
their areas
5. Top sales executive focus
more on human aspects of
administration
Disadvantages
1. Close control over staff-
line relations is essential
2. Time between problem
recognition and corrective
action tends to widen
3. Confusion may happen
especially if experts
overstep their authority
4. Administrative expenses
may increase
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 Qualities of sales executive

Ability to
1. To define the position’s exact function and duties in
relation to the company’s goals.
2. To select and train capable subordinates
3. Willingness to delegate sufficient authority to carry
out the task with minimum supervision
4. To utilize time efficiently
5. To allocate sufficient time for thinking and planning
6. Exercise skilled leadership

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