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MNM3703 Sale Management Full Notes
MNM3703 Sale Management Full Notes
Notes
MNM3703 Sales Management
2017 Exam Preparation Notes and Summary . By: Dubst3phs
NB: Don’t use bullet points in the exams.
TOPIC 1: THE SELLING PROCESS
STUDY UNIT 1: Sales careers and the selling process
Career stages:
1.5. Types of sales jobs
• Retail sales
o Instore (most common)
o Door to door
o Telephone
• Wholesales
o Distributor who purchase products for resale from manufacturers
• Manufacturer
o Works for organization that produces the product or service
Step 1 Prospecting
Step 2 Pre- approach
Step 3 Approach
Step 4 Presentation
Step 5 First trial close
Step 6 Determining objections
Step 7 Handling objections
Step 8 Final trial close
Step 9 Closing the sale
Step 10 Follow up
–Personal contact
Cold canvass
Look and listen
Important times during the presentation a trial close should take place
After strong selling point
After presentation
After answering objections
Before moving to close
1.6.6. Step 6: determining objections
Categories of objections:
• Uncommon
o Heard another company had a problem with your product/service
• Hidden
o When they don’t want to tell you that they closing down
• Stalling
o Want more time so they don’t have to deal with you
• No-need
o Good product but we don’t need it
• Price
o Too expensive, which means you didn’t add value in presentation
• Product
o Product is not well known
• Source
o Loyalty towards current provider
Forecasting:
➢ Is a team effort
➢ Market potential, sales potential and sales forecasting
➢ Aspects that affect sales forecasts
➢ Steps of sales forecast
➢ Different methods of sales forecasting
Process of organisations
Establish objectives
Determine activities required to reach set objectives
Group together similar activities that have a common purpose
Define responsibilities of each employee
Delegate authority to employees in order to carry out responsibilities
Define authority by delegating higher authorities to some
Provide resources that assist employees to achieve objectives
Co-ordinate efforts of all employees to the common set objectives
Executives
Middle management
Lower-ranked employees
Characteristics of responsibility:
✓ Continuous obligation ✓ Cannot be delegated
✓ Superior-subordinate relationships ✓ accountability
2.9. Delegations
Defined: assigning tasks and authority from a position to another
Elements:
✓ Assign duties ✓ Creating accountability
✓ Granting authority
Steps to ensure effective delegation:
a. Define task
b. Select subordinates
c. Assess ability and training needs
d. Provide explanations
e. State desires results
f. Consider resources
g. Set deadlines
h. Support and communicate
i. Provide feedback
2.13 Types of relationships (not in study guide but put in for good measure)
Formal and informal organisation
➢ Formed by ➢ Stability
➢ Rules and regulations ➢ Channels of communication
➢ Duties and responsibilities ➢ Superior and subordinate relationships
➢ Goals and objectives
d. Delphi method
Advantages Disadvantages
Minimises effect of group dynamics Very very expensive
Can use statistics
e. Market tests
Advantages Disadvantages
Under real conditions Competitors see you
Marketing mix can be tested to gauge effectiveness Competitors may react
Useful for new product and innovation Expensive and takes time
b. Moving average
i. Uses historical data over a set time.
c. Exponential smoothing
i. Weighted moving average of past sales data.
d. Other trends analyses
i. Most commonly used
ii. Statistical knowledge
e. Casual techniques
i. Correlation analysis
1. When sales are related to something other than time.
ii. Econometric models
1. Equation based
2. Inflation and interest rates
iii. Input-output models
1. Extremely complex
2. Based on specific industries
f. Decomposition
i. Significant difference over a shorter time.
g. Statistical demand analysis
i. Analyzing the past
ii. Based on volume of sales over a period of time.
iii. Influenced by changes in the environment or market.
Improving sales forecast accuracy (not in study guide but in text book)
• Sales manager should steer clear of only using forecast methods
• Only use methods suitable to your environment and sales department
• Develop small numbers of causes.
• Get an array of forecasts
• Use IT products that assist in forecasting
Routing is devising a travel plan or pattern to use when making sales calls to efficiently cover a territory.
A properly designed routing system has 3 primary advantages:
✓ Reduced travel time and selling costs
✓ Improved territory coverage
✓ Improved communication
Disadvantages of routing:
❖ Reduced salesperson initiative
❖ Inflexible and formalized plan
review job
Plan and
Prepare the conduct the develop job description
identify
job analysis job analysis specifications and
objectives
specifications
5.1.3. Job Analysis methods
Three methods
➢ Interview method
o Employees come in to be interviewed
➢ Observation method
o Observed and work and their performance records
▪ Direct observation- their work methods and behaviors
▪ Work methods analysis records the time taken to complete the task and action involved
▪ Critical incident technique identifies the work behavior that results in performance of the
employee
➢ Questionnaire method
o Distributing a questionnaire to employees and managers.
o May be incomplete as they fear how the information will be used.
See above
EXTERNAL
f. Print media i. Campus
g. Internet recruitmen
advertising t
h. Private j. Head
agencies hunting
k. Recommen
dations
Supervision in practice:
Step 1 Sales manager become familiar with each salespersons ability and personality
Step 2 Each salesperson prepares their own objectives for the coming period
Step 3 Sales manager develops and describes the firm’s objectives in a straightforward, understandable
manner
Step 4 Combining step 3 & 3 the sales manager determines objectives for the coming period
Step 5 Salesperson and manager plan detailed steps to achieve mutually agreed objectives
Step 6 Agree-upon deadlines to evaluate the degree to which the objectives have been met.
Three elements
❖ Intensity
❖ Persistence
❖ Direction
❖ Expectancy is influenced by
o having the right resources (e.g. training, time and raw materials)
o having the right skills (e.g. people skills)
o having the necessary support to get the job done (e.g. support from management) Instrumentality
is the belief that if you perform well, you will receive something in return. For example, if I do a
good job, there is something in it for me.
❖ Instrumentality is influenced by
o a clear understanding of the relationship between performance and outcomes
o trust in management to decide who gets what
o transparency of the process that determines who gets what outcome Valence is the significance
that the salesperson places on the anticipated outcome. For example, if the salesperson is mainly
motivated by money, he or she might not value offers of extra time off from work, for example.
8.2.6. The Churchill, Ford and Walker model of sales force motivation
Effort
Motivation Performance
Satisfaction Reward
1. Fixed element
a. salary
2. Variable element
a. commission
3. Fringe benefits
a. bonuses
4. Reimbursement of selling expenses
a. expenses
➢ Organizational approach
o To motivate the sales force
o To correlate efforts and results with rewards
o To control sales force activities
o To ensure proper treatment of customers
o To attract and keep competent sales people
o To be economical and stay competitive
o To be flexible and maintain stability
➢ Salesperson approach
o Income
o Simplicity
o Fairness
Performance problems:
1. Define expectations
2. Identify causes
a. Lack of skill
b. Lack of motivation
c. Lack of respect for rules
d. Personal problems
3. Select corrective action
Objectives
▪ High level of excitement
▪ Get retailers to order and display
▪ Expand distribution
▪ Manipulate levels of inventory
▪ Obtain shelf space
▪ Stimulate in store merchandising
PUSH= marketers are attempting to push products through he distribution channel towards end-consumers.
PULL= marketers to spend a lot on advertising to make brands a household name.
❖ Push
o Create consumer demand
o Make customer aware
o Common tactics
o Show rooms
o Negotiating with retailers
o Point of sales displays
o Examples of push strategies
▪ trade show promotions to encourage retailer demand
▪ direct selling to customers in showrooms or face to face
▪ negotiation with retailers to stock your product
▪ an efficient supply chain that allows retailers to provide an efficient supply
▪ packaging design to encourage purchase
▪ point-of-sale displays
❖ Pull
o Spend a lot of advertising
o Get consumer to come to you
o Tactic: mass media promotion
o Examples of pull strategies are
▪ advertising and mass media promotion
▪ word-of-mouth referrals
▪ customer relationship management
▪ sales promotions and discounts
Characteristics
❖ increasing competition ❖ greater consumer awareness
❖ lower prices x reduced costs ❖ increase in profits
Characteristics
❖ Sales volume peak ❖ Continued reduction in costs
❖ Decrease in market share ❖ Differentiation opportunities
❖ Profits start to decrease ❖ Innovation
Characteristics
❖ Market declining
❖ Falling sales and profits
❖ Product withdrawal
❖ Cheaper production
❖ Cheaper markets
➢ Qualitative
o Opinions
o Feelings
o Intuition
o Experience
➢ Quantitative
o financial metrics
▪ profit and net present value
o general marketing metrics
▪ market growth, market penetration
o customer-related metrics
▪ customer retention cost, lifetime value
o brand metrics
▪ brand value and brand equity
o sales and sales force metrics
▪ conversation rate, average sales
o advertising and promotion metrics
▪ reach, frequency, response rate
o price and pricing metrics
▪ cost, profit, margins, breakeven analysis
o channel metrics
▪ channel cost, channel coverage
o competitive metrics
▪ price, product performance, cost of purchase
o online metrics
▪ World Wide Web
o revenue product metrics
▪ cost, product performance
12.4. The reasons why sales have to be measured.
Determine how successful a business’s sales activities have been
• Cost effectiveness
• Relative effectiveness
➢ Sales metrics
• Sales quota
• Sales close percentage
• Scoring of industrial customers
• Sales expenses
• Sales close rate
• Sales totals
• Sales lost
• Training impact
• Cross sell rate
• Number of sales calls
• Number of new customs
• Sales revenue
• Gross profit
• Net profit
• Net profit margin
• Mark-up
• Unit margin
• Margin percentage
• Total margin
• Number of customers
• Cost per lead
• Conversion rate
• Regency
• Retention rate
• Churn rate
• Customer acquisition cost (CAC)
• Customer lifetime value (CLV)
• Average unit price
• Contribution margin unit
• Unit break even sales level
• Target volume
• Target revenue
• Average number of purchase per period
• Average spends per purchase
• Average number of purchase per period per customer
• Customer satisfaction