Final Sales Amp Distribution Management - Compress

Authors: Tapan k.
Panda & Sunil Sahadev
Course: BBA
Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad
Chapter 1: Introduction to Sales Management
Learning Objectives
1) Sales & Distribution Management

2) Evolution of Sales Management
3) Evolution of Personal Selling Strategies
4) Nature and Role of Sales Management
5) Types of Personal Selling
6) Types of Selling
7) Difference between Selling and Marketing
8) The Sales Management Process
Sales & Distribution Management
As a Composite Function of Marketing, it has evolved into key area of

Marketing Expertise and Knowledge
It focuses on:
Development of Sound Sales and Distribution Strategy

Management of Marketing Channels
Sales Force Management of an Organization
Sales & Distribution Management
Traditionally, marketers focused on Developing Methods and Practices to

enhance Sales Force Productivity and Efficiency – focusing on Individual’s
Performance
Now focus is on the Process (Formulating Strategies and Methods for

improving Selling Approach) involved in the Enhancement of Performance
 Sales Force Downsizing

 Application of Information Technology
 Enhance use of Telemarketing
 Key Account Management
 The use of Independent Sales Organizations
 Electronic Data Interchange
 Cross Functional Team Selling
Evolution of Sales Management
Marketing’s Early Development
 Marketing was the natural outgrowth of Production Surpluses
 Trading was the beginning of Modern Marketing System
 After purchasing goods, Traders resold them in other Geographical

Locations
 Traders were chiefly Responsible for the Physical Distribution of Goods
 Town Economy: Medieval Economic Organizations in which commercial

activities were concentrated in the Local Population Centers
 Agricultural Middleman: Early businessperson who purchased Staple

Products from the countryside and transported them to Local Market for
resale
 Guild System (Association of Craftsmen): The Guild System provided

the background from which First Industrial Society emerged
Bagman: Eighteenth Century Salesperson who sold Goods produced by the

Developing Factory System
 Bagman emerged in Late Eighteenth Century during England’s

Industrial Revolution
 Bagman are the first True Salespersons as they sold Goods for Firms in
which they did not have any Ownership
 They are called Bagman as they sold their Goods from Sample Bags
Sometime after 1810, there developed Two Methods of Personal

Selling
 Horse-Drawn Wagons – called Wagon Peddlers

 Retailing: Result of Strict Licensing requirements impose on
Peddlers
Credit Investigators: Supplier Employed people who evaluated

Retailers’ Credit and developed Good Will.
Commercial Traveler : Credit Investigators later on started to sell

Merchandise to Retailer
Greeters: Supplier Employed Sales Reps who Solicited Business from

Retailers on buying Trips
 Rural and Small Town Retailers both made annual Trips to Cities to buy
Merchandise
 They shifted their base to Railroad Stations
 Drummers: 19th Century Salespeople who journeyed to merchants’ places

of business
 Increase competition made Greeters to travel Outside the City
 The term Greeter was replaced by Drummer
 There are Two Views about the Term “Drummer”
 They “Drummed up” Sales for Manufactures and Wholesalers which

they represented
 The trunks which were used for carrying Samples, Personal Items
were shaped like Drums
Selling in 20th Century
 From Production to Sales
 At first, Selling was overshadowed by tremendous growth of

Manufacturing (Industrial Revolution)
 Focus was on Production rather than Selling
 Production Surpluses resulted in Re-emergence of Sales Era until WWII

 Great Depression >> Aggressive Selling >> Need for Successful
Marketing
 Creation and Rapid Growth of Corporate Departments designed to
Support Sales Effort e.g. Marketing Research
Postwar Era >> Modern Sales Era >> Professional Salespeople >>
Greater Emphasis on Educated Sales People and Extensive Sales Training
 Traditional Sales Approaches
During the “Modern Sales Era” Traditional Sales Function called

“Salesmanship Approach Emerged”
 Salespeople’s behavior was considered the Key Ingredient in Sales

Process
 Success or Failure of a Sales Call was depended on how the Salesman
handled a Prospect
 There were Three Variations of Traditional Sales Approaches:

 Canned Sales Presentation
 Stimulus Response Theory
 Selling Formulas
 Canned Sales Presentation
 A prepared, Structured Sales Script memorized by Salespeople

 First used in Door to Door Selling and Now in Telemarketing
 Company considers the Best Way to Sell
 Major Weakness – Prospect is treated as essentially Passive
 Stimulus Response Theory
 If the Salesperson Says or Does the Proper thing (Provides the Right
Stimulus) then Prospect will respond to the Stimulus by buying Good or
Service
 Selling Formulas
 Salespeople has to lead Prospects through various Steps in a

Persuasive manner
 Arthur Fredrick Sheldon Selling Course

 AIDR: Attention, Interest, Desire, Resolve are four progressive
Identifiable Stages before making Purchase Decision
 AIDA: Attention, Interest, Desire, Action
 Emergence of the Marketing Concept
 During 1950s and 1960s, The Marketing Concept emerged as a Framework

for Business – Philosophy of Customer Orientation
 The formation of Technically Qualified Sales Support Departments aided in

Professionalization of Field Sales Force
 Major Changes under Customer Orientation Philosophy are:
 Problem Solving Role of Salesperson

 Helping customers to buy rather than attempting to sell them
something
 Building Long Term Relationships
 Questioning and Need Analysis has replaced Sales Presentations
Evolution of Personal Selling Strategies
1. Persuasion: The peddlers carried their inventory and their goal was to
Persuade Buyers to buy goods at hand
2. Negotiation: As competition grew and buyers had a choice to opt for a

particular player:
 It became requirement to Understand the Needs of Customers

 Modification of Products, Prices and other Related Services
3. Consultative Selling (1970s): The sellers were required to identify New

Needs and Uses for the existing products:
 Consultative Selling required Sellers to think like Buyers
4. Business Management (1980s – 1990s):
 Emphasis was put on Management of Sales Territories and Accounts as

Profit Centers
 Salespersons were expected to have Financial Knowledge
 Training in Business Management and Practice of Business
Management Strategies
5. Partnership Strategies:
 Linking of Information Systems of Buyers and Sellers to improve

Product Planning and Reducing Inventory
 Information Sharing
Salespersons are trained on Data Processing, Data Warehousing &

Mining, Financial Analysis and Relationship Building Strategy
Types of Personal Selling
1. Industrial Selling: It is basically termed as Business to Business Selling

and it is grouped into Four Categories based on Consumer Base:
1. Selling to Resellers: Wholesalers or Retailers which buy Finished

Goods and resells them to End Users
2. Selling to Business Users: This means Output of one Producer

enters the Production Process of another Producer to manufacture a
Final Good
3. Institutional Selling: Institutional Customers use products in their

Daily Operations
 Products are used to Support Buyer’s Business rather than

Producing Buyer’s Products
4. Selling to Government: In most countries, Government is a Leading

Buyer
Types of Personal Selling
2. Retail Selling: Retailing is defined as defined as all the Activities directly

related to Sales of Products and Services to Ultimate Consumer
 In Retail Environment, a customer approaches the seller
3. Service Selling: Services are Activities or Benefits provided to a

consumers and Services are different from Products in 4 Areas:
1. Services are Intangible
2. Services are Produced, Sold and Consumed at the Same Time
3. Services cannot be Standardized
4. Services cannot be Stored or Inventoried
Types of Selling
The diverse nature of Buying Situations demand a Diverse Pattern of Selling

Function and Selling Function varies according to nature of Selling Tasks:
1.Order Taker Salespeople
A. Inside Order Takers are the Sales Assistants and their role is just to
Complete the Transactions
B. Delivery Salespeople: Their job is to Deliver Products to the

consumers
C. Outside Order Takers visit the customers regularly and their

primary task is to Respond to Customer Calls rather than seek New
Customers
2.Order Creators
Missionary Salespeople are the sales staff who do not close a sale but
Persuade the customers to Promote a Seller’s Brand – Medical
Representatives
Types of Selling
1.Order Getters Salespeople: These are the salespeople whose objective

is to Persuade customers to make a Direct Purchase.
A. New Business Salespeople persuade New Buyers and Non – Users

to buy company’s Products & Services
B. Organization Salespeople are the Industrial Sellers who try to

establish and nurture long term relationships with Organizational
Buyers
C. Consumer Salespeople comprise of Door to Door Salespeople who

sell Products & Services for Individual Consumption
D. Technical Support Salespeople support Frontline Salespeople when

product is Technically Complex or needs negotiations demanding
Financial Attention
E. Merchandisers provide Sales Support in Retail and Wholesale

Selling. The give advice on Display, Execution of Sales Promotion
Programs
Prepared and
By: Hamid Ali Raza help
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Difference between Selling & Marketing
Selling Marketing
1.Emphasis on Product 1.Emphasis on Consumer Needs and

Wants
2.Product First & then Decision to
sell it 2.Understanding of Customer Needs
& then a Product or Service to
satisfy these Needs
3.Management is Sales Volume 3.Management is Profit Oriented

Oriented
4.Planning is Long Term – New
4.Planning is Short Term – today’s Products, Tomorrow's Markets &
Products & Markets Future Growth
5.Stresses needs of Seller 5.Stressed Needs of Buyer
6.Views business as Goods 6.View business as Consumer

Producing Process Satisfying Process
Difference between Selling & Marketing
Selling Marketing
7.Emphasizes on staying with 7.Emphasizes on Innovation

existing Technology and Reducing
Costs 8.All departments work in Integrated
manner
8.Different departments work
separately 9.Consumer determines price, price
determines cost
9.Cost determines price 10.Marketing views customers as

the very beginning of a Business
10.Selling views customers as last
link in Business
The Sales Management Process
Sales Management is the process of attaining Sales Force Goals in Effective

and Efficient Manner through Planning, Staffing, Training, Leading and
Controlling Organizational Resources. Sales Management Process covers
Three Interrelated Steps:
1.Formulation of a Strategic Sales Management Programme
Evaluating Environmental Issues Effecting Organization (SWOT, PEST, Core

Competencies)
Organizing and Planning Over All Personal Selling Efforts
Integrating Over All Personal Selling Strategy with other Elements of

Marketing Strategy
2.Implementation of Strategic Sales Management Programme
Selecting, Training, Leading and Motivating appropriate Sales Personnel
Designing & Implementing Policies and Procedures to direct Efforts of

Salespeople toAliachieve
Prepared By: Hamid Raza | Source: desired Corporate
Sales & Distribution Objectives
Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad
The Sales Management Process
Sales Management is the process of attaining Sales Force Goals in Effective

and Efficient Manner through Planning, Staffing, Training, Leading and
Controlling Organizational Resources. Sales Management Process covers
Three Interrelated Steps:
3.Evaluation and Control of Sales Force Performance
Developing Methods and Practices for Monitoring & Evaluating Individual &
Group Sales Force Performance
Taking Corrective Steps either in Formulation or Implementation

Programmes to achieve Corporate Goals
Chapter 2: Selling Skills & Selling Strategies
Learning Objectives
 Selling & Buying Styles

 Sales Task & Function
 Communication Skills
 Listening Skills
 Conflict Management & Resolution Skills
 Negotiation Skills
 Problem Solving Skills
Buying Styles
Selling Styles
Sales Task & Function
A salesman has to undertake various Tasks/ Functions during the Process of

Selling. Different Sales Tasks/ Functions from Selling Point of View are:
1.Communication Function: When a salesperson gives Sales Presentation or

makes a Sales Call
2.Listening Function: A Customer may have Queries, Doubts and

Apprehensions and wishes the salesperson give him Patient Hearing, thus,
Salesperson must perform Listening Function
3.Information Function: Providing Information about Existing Products of the

company and New Products that are likely top come in market
4.Negotiation and Bargaining Function: Salesperson has to Negotiate and

Bargain for the benefit of the Organization (usually in Non – Standardized
Markets)
5.Problem Solving Function: In case of Solution Selling a Customer has a

problem and he expects the salesperson to solve his problem
Types of Selling Situations
According to different Marketing and Situational Factors; Types of Selling are:
1.Maintenance Selling
The art of Servicing the Existing Accounts, Securing Promotional

Cooperation, Counting Inventory & Taking Replenishment Orders
There is no need of Prospecting as this kind of selling is done with Existing

Customers
2.Developmental Selling
The art of Contacting Potential Customers and Building Business for the
Firm
Salespeople engaged in Developmental Selling are called Business

Development Sales Executives
These sales people take the prospect through the complete Selling Process
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By: Hamid Ali Raza Closing a Sale.
Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad
Selling Skills
Communication Skills
The ability and expertise to communicate is necessary in Selling Function
Salespeople should possess Good Vocabulary and should be able to express

themselves Intelligently
A salesperson ability to perceive Verbal & Non – Verbal Clues help in

answering Objections and finding about the Purchase Intention
A good Voice Quality improves the Personality of the Salesperson and

contributes to the success
Effective Communication Skills contribute in Nurturing Long – Term
Relationships with customer based on Mutual Trust through:
 Truth of Words
 Intent and Empathy
Communication Skills are important for Persuading Customers
Communication Process
Communication Process is defined as a Set of Activities & Systems Integrated
for an Exchange of Ideas, Concepts, Information and Knowledge between a
Sender and a Receiver through Alternative Channels e.g. Sales Presentations,
Sales Literature & TVCs are the examples of Sales Communication
A Typical Communication Process has the following Components:
Source/ Sender: (Salesman who provides information about Product or

Service)
 Source has Ideas, Concepts, Information & Knowledge to be
communicated to Audience
 Ideas, Concepts, Information & Knowledge have to be encoded in
presentable form
 E.g. Print Ads, TVCs, News Releases etc.
Receiver: (Customer)
 Receiver is the one for who the communication is directed at

 Receiver Provides the Feedback
Communication Process is defined as a Set of Activities & Systems Integrated
for an Exchange of Ideas, Concepts, Information and Knowledge between a
Sender and a Receiver through Alternative Channels e.g. Sales Presentations,
Sales Literature TVCs are the examples of Sales Communication
A Typical Communication Process has the following Components:
Channel/ Medium:
 Tools or Systems used to transmit Message (Ideas, Concepts,
Information, Knowledge)
 E.g. Electronic and Print Media, Internet
Feedback:
 Receiver assesses the Effectiveness & Response of the
Communication through Feedback
 E.g. Interest in Product, Purchase Decisions, Rejecting any Sales
Offer
Noise: Any element which affects the Transmission or Effectiveness of

Reception of Message
Types of Sales Communication

There are Two Types of Sales Communication
1.Non Personal Communication
It includes the use of Mass Media for providing Product Information
 Mass Media includes Newspapers, Television, Internet
The effectiveness of Non Personal Communication is Limited:

 Scope of Recipients is not known
 Ability to persuade customers is less
Effective in disseminating Product Information to Enhance the Level of

Awareness
2.Personal Communication
Effectiveness of this Medium is High

 It takes Customers to High Level of Buying Decision Process
 Customers are provided on the Spot Solutions/ Response to their
Problems and Objections
 By:
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Forms of Communication
There are Two Forms of Communication
1.Non Verbal Communication
It includes Information which is not in Oral &Written Forms
It is the most Basic Form of Communication and includes:

 Facial Expressions, Gestures, Spatial Relationships, Attitude towards
Time & People, Dress Code, Voice Intonations, Expression of
Emotions like Laughter, Surprise etc.
Non Verbal Communication is Less Structured and More Difficult to Study/

Understand
2.Verbal Communication
Verbal Communication consists of Words arranged in Meaningful Pattern

 It can be Oral or Written
 Salespeople prefer Oral Communication over Written Channels
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Management Message
by Tapan K. Panda is| Limited
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Managing Body Language

The Non Verbal Cues taken together are called Body Language. Salespeople
should manage Body Language to show that they are Confident to Handle
Sales Situation
1.Personal Appearance
Personal Appearance includes elements such as Dress, Hair Style,
Accessories and Over All Grooming
First Impact of any Potential Buyer is created by Personal Appearance of
Salesperson; even before he speaks
Salespeople should be careful about their Personal Appearance as it may

put Audience in a Hostile, Friendly or Agreeable Position

Sales Situation
2.Posture
Postures refers to the way one Stands, Sits, Walks and it also includes the
Mobility of Hands, Legs and other Parts of the Body
Postures are indicators of whether a person is Vibrant, Nervous, Jittery,

Confident or Self – Assured
A salesperson should cultivate his Posture to create Positive Impact:
 Stand Tall, Feet Together and Weight on Instep and Chin should be
parallel to Floor
 Sitting Straight
 Learn where to keep Hands and How to shift Weight of the Body

Sales Situation
3.Gesture
Gestures include movement of the hands, face, or other parts of the body
Gestures enhance the Impact of what is being said
Gesture may or may not accompany Oral Delivery
Practice in front of Mirror how to use different kind of Gestures to improve

one’s Communication Skills

Sales Situation
4.Facial Expressions
Face is the most Expressive Part of the Body and can add meaning to Verbal
Communication
 A Smile is a Symbol of Friendliness
 A Frown is a Symbol of Discontent
 Raising Eyebrows as an Expression of Disbelief
Negative Facial Expressions can decrease the Effectiveness of a Sales

Presentations
Negative Facial Expressions include:

 Deadwood Expression
 Biting Lips
 Raising Eyebrows
 Blinking Eyes too much

Sales Situation
5.Eye Contact
Eye Contact is an Automatic Process of Obtaining Feedback
Eye Contact enables Salesperson to Alter, Adjust, and Reframe his Sales
Message
Eye Contact should be maintained as it Expresses Sincerity of Salesperson

and Attentiveness of Customer

Sales Situation
5.Space Distancing
Salespersons does not allow to invade Personal Space until the relationship
is very Friendly or if there is Prior Relationship
Social Distance (A Zone of 4 – 12 Feet) is maintained for Formal

Presentation
Social Distance also includes the Standing/ Seating Position
Noise/ Barriers to Communication

Any element which affects the Transmission or Effectiveness of Reception of
Message will be categorized as Noise
1.Physical Noise
Noise Emanating from Telephones or Computers or any other Physical

Objects
2.Psychological Noise
It includes Fantasies, Daydreams and Mental Blocks due to Culture, Religion
etc.
3.Factual Noise
It results from Factual Distractions which may be due preoccupation with
factors which deter the reception of real message

4.Semantic Noise
It occurs when one Over – Reacts to an Emotional Statement
5.Self Focus
A Level of Preoccupation with thoughts about oneself
6.Self Defensiveness
It results when people are threatened about their positions due to Negative
Feedback
People tend to make arguments and Ignore the Communication by being
Self Defensive
Due to Self Focus the Attention Level becomes Low

7.Experiential Superiority
It is found in people who have gone through Varied Experiences
8.Egocentrism
It is the tendency to view oneself as the center of everything
9.Selective Perception
When Receiver is not in Same Frame of Mind as that of Sender due Poor
Level of Comprehension or High Level of Distortion
Selective Attention also means that people will pay more Attention to
Information which is of Value of them in the Present Situation rather than
which has Long Term Relevance
Listening Skills
Listening is an Active Search of Meaning in the Message Received
A good listener welcomes New Ideas, stays Informed, Up to Date and Out of
Danger
Effective Listening needs Conscious Effort and Willing Mind
Effective Listening supports Effective Relationships and Enhance Efficiency

of Salesperson
Types of Listening
There are Three types of Listening. These types differ on the Basis of Purpose
of Listening or in the Degree of Feedback or Interaction is required
1.Content Listening
The objective of Content Listening is to Understand and Retain the

Speaker’s Message
Feedback is not involved as it is only the reception of Message
2.Critical Listening
The objective of Critical Listening is to Understand and Evaluate the

Meaning of the Speaker’s Message at Several Levels
 Logical Level of Argument

 Strength of Evidence
 Validity of Conclusions
 Implications of Message
 Speaker’s Intention and Motives
Types of Listening
3.Active/ Empathetic Listening
The objective of Empathetic Listening is understand Speaker’s Feelings,

Needs and Demands
The purpose is to appreciate Listener’s Perspective whether we Like it or

not
By Listening in Empathetic way; the Listener allows the Speaker to vent his
Emotions
Chapter 4: Managing Sales Information
Learning Objectives
 Market/ Sales Forecast and Market Demand

 Marketing Decision Support System
 Importance of Sales Forecasting
 The Forecasting Process
 Approaches to Forecasting
 Sales Forecasting Methods
Market/ Sales Forecast and Market Demand
Market/ Sales Forecast: It is the estimated Rupee or Unit Sales for a

Specific Future Time Period based on Company’s Marketing Plan and an
Assumed Market Environment
It depends on:
 Industry Sales
 The Market Share of the Firm
 The Growth Rate in the Category
 The Performance of Product Line and Individual Product’s Market
Market Demand: It is the Sum Total of All Individual Demand for a Product
or Service
It depends on:
 Consumer Preferences (Advertising, Innovation, Changes on Customs

&Traditions)
 Income Levels of Consumers
 Price of By:
Prepared other
Hamid AliGoods
Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad
Marketing Decision Support System (MDSS)
MDSS is an Ongoing, Future Oriented Information Structure designed to

Collect, Collate, Categorize, Edit, Store and Retrieve Information to Aid
Decision Making in an Organization’s Sales & Marketing Programs
It involves Problem Solving Technology consisting of People, Knowledge,

Software & Hardware
It collects Data from Transaction System & Analytical System and provide
Analysis for Decision Making
 A Valuable MDSS provides Fast, Less Expensive and more Complete

Information for Sales Management Decision Making
Senior Management can Continually Monitor Sales, Markets, Performance of

Sales People and Other Marketing Systems in details
 MDSS is Key for Accurate Sales Forecasting
Importance of Sales Forecasting:
Success of Business depends on Sales Forecasting because:
Supply Chain Management & Value Chain Management depends on

Demand Patterns of Product
 Procurements can be Channelized as per Demand
Inventory Level during Production and Final Output Inventory can be

Regulated and Modified depending on the Sales Patterns
 It forms the Basis for developing Production Schedules
 It helps managers to decide Sales Quotas to different Segments, Zones &

Individual Salesmen
 It forms the Basis for Developing Sales Budgets
An Integration of all these Variables help in Developing Marketing Plan,

Growth Strategies & Marketing Offer
Sales Forecasting Process
It is defined as Series of Decisions & Actions in Identifying the Sales

Forecasting Objectives, Determining the Independent & Dependent Variables,
Developing a Forecasting Procedure and using the Available Data in the
Selected Method to Estimate Future Sales
Supply Chain Management & Value Chain Management depends on

Demand Patterns of Product
Sales Forecasting Objectives: Rupee Sales, Unit Sales or Number of

Salespeople Hired
Dependent Variables are the Variables which are Forecasted (Rupee

Sales, Unit Sales or Salespeople Hired)
Independent Variables are the Market Factors which influence

Dependent Variables (Quantitative)
 Forecasting Methods & Methods: Quantitative or Qualitative
 Sales Forecast is finalized and

by Tapan K. Panda itSahadev
& Sunil is Evaluated and
| Preston University, Modifications are made
Islamabad
Approaches to Sales Forecasting
There are Two Approached to Sales Forecasting:
1.Break Down Approach
General Environment Forecast: It is the Study of Factors of Internal &

External Environments that influence to a Significant Levels (Pricing, Product
Changes, Distribution, Promotion, Financial Resources, Management Skills,
Technology, Economy etc.)
Industry Forecast/ Market Potential: The Sum Total of All Individual Demand
for a Product or Service or the entire Industry
Company Sales Forecast: The maximum Estimated or the Potential Sales

that company may reach in a defined Time Period under given conditions
(Percentage of Industry Sales)
Sales Forecast for the Product Lines
Individual Product Sales Forecast

by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad
Approaches to Sales Forecasting
There are Two Approached to Sales Forecasting:
1.Build Up Approach
It is the Reverse of the Break Down Approach
Strategic Units or Unit Heads make Individual Forecasts
Individual Forecasts are combined to make Broader Forecast of the Firm
Difficult Method when Firm has Large Product Offerings and Serving Multiple
Markets

Sales Forecasting Methods
Based on the Type of Input Data; there are Two Types of Sales Forecasting
Methods:
1. Qualitative Methods: These methods are based on Judgments either of

Experts or a Collective Judgments of Knowledgeable People of Industry:
A.Experts Opinion Method: Experts in the Specific Area are asked for their
Forecast Estimates:
Marketing Professionals
Distributors/ Dealers
Industry Associations
Marketing Consultants
It can be in the form of Individual or Group Forecast
Group Approach has Two Methods:

 Key Executives submit Independent Estimates without discussion and
Individual Estimates are Averaged into One Estimate
 Group discussesby Tapan
and presents
K. Panda separate
& Sunil Sahadev estimates,
| Preston University, Islamabad differences are
1. Qualitative Methods
B.The Delphi Method: This is an improvement on Expert Opinion Method:
Group of Experts and Delphi Coordinator are selected
Experts give their Written Responses to Coordinator
Coordinator processes, complies and refers them back to Panel Members for
Revision – this process continues for several Rounds (Usually Three Rounds)
Process stops when a consensus is reached
Only Coordinator will know all the Members of the Team and only he will
have access to all Responses and he runs Statistical Analysis
The process aims at Gradual Reduction of Variability
This method is widely used for Sales Forecasting regardless of Company

Size by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad
C.Sales Force Composite: This method is based on the fact that individuals
with Direct Contact with Customers will be better informed
Organization’s Salespersons come up with their Forecasts
Individual Forecasts are summed up to get a Overall Demand Forecast for

the product
Results can be affected by the:
 Staff Biases
 Lack of Interest in the Process
 Ignorance about wider Economic Changes and Trends

D.Survey of Buyer’s Expectations: This method is based on Survey of

Buying Intentions and Market Tests
The Survey of Buying Intentions involves the selection of a Sample of

Potential Buyers and getting information on their likely purchase of Product in
Future
Forecast based solely on this method tend to be overly Optimistic; as a

positive response in survey may not result in Purchase in Future

D.Historical Analogy Method: This method is used for Forecasting the

demand for a Product or Service for which there is no Past Data
Marketing Personal may use Historical Analogy between Two Similar

Products and derive Demand for New Product using Historical Data

Chapter 5: Sales Organization
Learning Objectives
 Sales Organization
 Objectives/ Advantages of Sales Organization
 Factors Influencing Structure
 Organizational Principles
 Span of Control
 Centralization and Decentralization
 Integration and Coordination
 Organizational Design
 Line Design
 Organizational Design by Territory
 Organizational Design by Management Function
 Organizational Design by Product
 Organizational Design by Customer
 Combined Organizational Design
 Key Account Sales
 Emerging Organizational Designs
 Agency & Distribution Selling
 Shared Sales Force
 Telemarketing
Number of Sales People
Sales Organization
Definition: A Sales Organization is an organization of Individuals either

working together for the marketing of Products & Services manufactured by
an enterprise or for Products that are procured by the firm for the purpose of
Reselling.
Objectives/ Advantages of Sales Organization
Sales Organization helps to achieve coordination among the activities of

individuals
SalesOrganization defines the duties, roles, rights and responsibilities of

Salespeople
Aproper Sales Organization helps in the flow of both upward and downward
communication for taking Sales Related Decisions
A proper Sales Organization also removes Duplication of Efforts
Sales Organization helps in achieving Effectiveness and Efficiency –

achieving maximum
Prepared By: Sales
Hamid Ali Raza | Source: Sales &Targets with minimum
Distribution Management by Tapan K. Panda Costs
& Sunil Sahadev | Preston University, Islamabad
Objectives/ Advantages of Sales Organization
ASales Organization serves as the unified Contact or Relationship Point with

Customers
Sales
Organization contributes to building the morale of Salespeople as they
become clear about his position, role and responsibilities
Factors Influencing Sales Organizational Structure

1. Product & Service Related Factors
Incase of FMCGs (soaps, oils, toothpaste) the Size of the Organization is

Large as a large customer base is to be served
Organization will be Complex and Large in Size when both Product Mix and
Quantity in each Sale Category is Large

2. Organization Related Factors
If
the Size of Enterprise is Small then it will have limited number of Products
and Customers and a Simple Structure is required and Vice Versa
Organizations having Specialized Products and Serving Niche will have Small
and Simple Sales Organization
An organization with Limited Financial Resources will prefer to engage

intermediaries for distribution and keeps Sales Organization Simple and Vice
Versa
Iforganization follows a Centralized Policy for Sales Related Decisions then

Sales Organization will be simple and Vice Versa

3. Marketing Mix Related Factors
Sizeof the Market also determines the Structure and Size of Sales
Organization
 Global, International, National Market >>> Large Sales Organization
Organizations which have Selective Distribution Strategy as compared to

Organizations with Intensive Distribution Strategy will have Simple Sales
Organization
Price
Policy also influences the Size and Structure of Sales Organization
 Low Price Products with High Demand and Large Customer Base >>>
Large Sales Organization
4. External Factors
The Customs and Traditions used in the past to cater the market influence
the Size and Structure of the Sales Organization
Organizational Principles
1. Span of Control
Span of Control refers to number of Subordinates and Sales Staff under the
Supervision of one Sales Manager
Narrow Span of Control: Less or Limited Number of Sales Staff under the
Supervision of one Sales Manager
 Appropriate Model when there are New Recruits to be handled in the

field
 New Recruits learn from Experienced Managers when it is One to One
Coaching
 It has following disadvantages:
 Complicated Communication Flow
 Demotivation due to Direct Supervision
 Resistance by Innovative New Recruits to Traditional Methods of
Coaching
 Isolation of Management from Grassroots Levels
 Higher Operations Costs
Wide Span of Control: Large Number of Sales Staff under the Supervision
of one Sales
Prepared Manager
By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad
2. Centralization and Decentralization
The extent of Control and Authority of the Top Management versus the Field
Sales Manager over the Sales Force decides the Level of Centralization in an
organization
Centralized Organization: In Centralized Organizations; Top Management
decides:
 Recruitment, Selection, Training, Supervisions, Fixation of Quotas,

Territory Allocations and Compensation Plans
 Consistency in Marketing Plans, Uniformity in Products & Services and
Coordination & Integration of Sales People are the Advantages of
Centralization
 Helps in saving Recruitment, Selection, Training and Motivational Plan
Costs
Decentralized Organization: Field Managers take all the decisions
 It helps Organizations to be more Competitive and Responsive at

respective Market Levels
Prepared By:Greater
Hamid Ali Raza Freedom to action results
by Tapanin Motivated
& Sunil Sahadev and
| PrestonProductive

| Source: Sales & Distribution Management K. Panda University, Islamabad
3. Integration and Coordination
Integrationand Coordination relates to Flow and Use of Communication and
Marketing Intelligence
Traditional (Butter Fly) Approach: All information flows through the
Sales Organization or Sales is the only Upfront Department
Modern (Bow Tie) Approach: Organization across all departments is

integrated to serve customers
Sales Department provided information to:
Research & Development for New Product Development

Sales and Marketing Departments interact for deciding Advertising
Policy, Sales Promotion, Cooperative Advertising with Intermediaries
Sales Department also provides about Financial Arrangements, Credit
Policy, Credit Collection
Coordinates information on Compensation and Dealer Motivation Plans
Organizational Design
Organizational Design refers to:
Formal and Coordinated task of assigning Territories
Establishing of Flows of Communication
Establishing Responsibilities of Sales Groups and Individuals
Organizations adopt different kinds of Structures e.g.
 Line Organization
 Organization Design by Territory
 Organization Design by Management Function
 Organization Design by Product
 Combined Organization Design
Line Organization
Small Firms have Line Organization
Chief Executive does the Decision Making and Decisions flow down the Line
for execution
Chief Executive has all the Authority over Sales Function
Advantages
Decisions are made Faster, Overhead Costs are Low and Salespeople need
to follow command
Disadvantages
Salespeople do not have time for Sales Planning and are busy in achieving
Targets set at the Top
Organizational Design by Territory
Organization is designed on the basis of Geographic Territory
SeveralAreas are combined together as Territory for assigning a Supervisor

and several Territories are combined to assign a Sales Manager
Advantages
Travel Times are Limited and Sales Force remains close to the customers
Quality
of Customer Service is Better as Number of Customers is Limited
and Geographically Concentrated
Conflict is minimum as customers are identified in each area
Demand for New Products can be identified
Product Modifications, Marketing Strategies, Sales Recruitment can be

adjusted to specific requirements of Level of Competition, Area, Job and
Demand
Organizational Design by Territory
Disadvantages
Salespeople have to sell entire Product Line in a Specific Area to all Types of
Customers
Salespeople spend too much time on Products which are easier to sell but
may not be Profitable or provide High Growth Potential
Coordination is difficult over Territories
There is High Probability of Conflict in Resource Allocation
These problems can be solved through:
 Close Supervision
 Proper Incentive Structure
 Hiring Better Sales Talent
 Professional Training and Technical Support
Organizational Design by Management Function
It is the Grouping of Sales Task according to their characteristics
Firms need Special Expertise for which Selling Activities are divided into
Functions to be performed
 Sales Planning
 Recruitment & Training of Salespeople
 Supervision of Sales Personnel
 Advertising Function
 Sales Promotion
 Sales Analysis & Marketing Research
Advantages
Special Expertise and Support makes organization profitable
Specialization is achieved at different Levels of Hierarchy
Response to and Decision Making on Sales related problems is faster

Organizational Design by Management Function
Disadvantages
Dependence on each other on Delivery of Final Customer Service
Integrationis achieved at Higher Level which makes the job of Higher

Authority Complex
Interdepartmental rivalry and Non – Cooperation issues arise
Organizational Design by Product
Organizations with Diversified Product Portfolios prefer Design on the basis

of the Type of Products
ProductSpecialization is necessary when products are Technical and

Complex but completely different from each other
Advantages
Close attention to each Product in Product Portfolio
Salespeople can master all the relevant Product Information
The interference from other departments is minimum
Satisfaction of Customer is highest as customer receives maximum

attention
Organizational Design by Product
Disadvantages
Coordination of Sales function is difficult across different product categories
There can be Duplication of Effort when Salespeople from the same

organization call same customers; it increases cost of selling
Operational Cost is high because of Large Number of Employees
Organizational Design by Customer
Organizations with several and distinct markets are designed on the of

Customer Profiles
These designs are based on Customer Profitability Analysis and Varied

Service Delivery
Each Salesperson sells entire Product Line to the same customer
Advantages
Thisdesign is Customer Driven and Salespeople gain more Knowledge on

Customer Requirements and become experts
This design helps in building Successful Customer Relationships
Salesand Marketing Planning developed depending customer requirements

and behavior
Organizational Design by Customer
Disadvantages
 This design is expensive to maintain
 There is fear of Duplication of Effort as controlling and coordinating

activities are difficult in large firms
Combined Organizational Design
 Many organizations that are Large in Size and Complex in Product Offering
prefer complex design
 This design can be a combination of Product, Function, Geography or the

customer depending on the Market Coverage and Scope of Business
Chapter 6: Management of Sales Territory
Learning Objectives
 Sales Territory
 Designing a Sales Territory
Sales Territory
Definition: A Sales Territory is a Group of Present and

Potential Customers assigned to an individual salesperson, a
group of salesperson, a branch, a dealer, a distributor or a
marketing organization at a given period of time.
Advantages of Sales Territory
It ensures better Market Coverage, Effective Utilization of Sales

Force and Efficient distribution of Workload among Salespeople
It enables Sales Managers to Evaluate the Performance of

Salespeople, Control over Direct and Indirect Costs of Sales Function
and Optimum Utilization of Sales Time by Sales People
Restricting Sales Force to Specific Geographic Areas helps in

generating more Sales from the same area
Sales Territory
Advantages of Sales Territory
Sales Territory ensures that Salespeople do not encroach on each

other’s Territory
Restricting Sales Force to Specific Area helps salespeople to

understand the Current and Latent Needs of Customers and to serve
them better
Disadvantages of Sales Territory
A Sales Territory may not help a New Established Organization or

where Sales are made through Personal Relationships
Sales Territory may also not suitable for organizations which are
selling Highly Sophisticated and Technically Complex Products
Organizations which have customer base distributed over a vast

Designing Sales Territory
Various Factors are considered while Designing a Sales Territory
Size of Organization
Level of Competition in each Product Category
Number and Quality Level of Products in Portfolio
Type and Quality of Services and Customer Support to be provided
Quality of Salesperson serving in the Organization
Step 1: Select Appropriate Geographical Control Unit
Small enough to allow Flexibility but not so small that High Level of
Data Computation is needed
Homogenous and of Reasonable size to achieve Economies of Scale
The Basic units can be Country, State, District, Division or Block

with Clear Boundaries
Basic Control Units should be based on Trading Area. A Treading

Area is made up of a Principal City and the surrounding dependent
area
Step 2: Criteria
Managers identify the Sales Potential of each Geographical Control

Unit based on Current Customer Base as well as Future Customer
Base
Based on Forecasted Sales (for both Current and Potential

Customers) and Geographic Size Managers Combine Contiguous
Control Units to form Territories
Each Sales Territory should as Equal as Possible in terms of Market

Potential
Differences in the Workload and Sales Potential due to different

Levels of Competitive Activity are ignored at this stage
It is also assumed that all Salespeople have equal Experience and
Capabilities
Step 3: Starting Point
After ascertaining Sales Potential in Control Units, a Sales Manager

should form Tentative Sales Territories
 Location Point
 Trading Area
 Location of Large Account
 Central Geographic Location or State Capital
Step 4: Territory Shapes
Shape of Territory affects the Sales Expenses and Ease of Coverage

and Less Time on Travel
 Wedge Shaped: Used by FMCGs which serve both Urban and

Rural Areas
 Circular Shaped: These are suitable when companies have

their accounts distributed across equally sized areas.
Salesperson is located in Central Part of the Territory and
Travels uniformly to different areas
 Cloverleaf Shaped: It is used when accounts are distributed

randomly through out the Territory
Step 5: Control Units Adjacent to Starting Point
After deciding Starting Point Sales Managers then combine Control

Units to build up Market
Sales Manager keeps on running totals on the Allocation Criteria for

each newly designed Territory
The process continues until all Control Units are assigned to each
Sales Person
At this Level, Sales Territories are tentative and necessary

adjustments can be made in future on the basis of Scope of Market
Coverage
Chapter 7: Management of Sales Quota
Learning Objectives
 Sales Quota
 Importance of Sales Quota
 Principles of Setting Quota
 Procedure for Setting Quota
 Types of Sales Quota
 Methods of Setting Sales Quota
 Quotas Based on Sales Forecasts and Potentials
 Quotas Bases of Forecasts
 Quotas Based on Past Sales or Experience
 Quotas Based on Executive Judgement
 Quotas Based on Salespeople Judgement
 Quotas Based on Compensation
Sales Quota
 Sales Quota are the Targets (Sales Target and Duties) that Salespeople try
to achieve within a Specific Period of Time, which contributes towards
achieveing the Organizational Goals regarding Sales Forecasts
 It is an expected Performance Objective
 Quotas are assigned to Sales Units such as Departments, Divisions and

Individuals
Importance of Sales Quota
 Motivating Salespeople
 Objectivity in Measurement and linked with Reward Systems

 Feedback on Performance
 Management by Expectation
 Focus on High Performers and taking care of their Interests

 Focus on Poor Performers and making efforts in their Skill Building
 Giving Direction to Salespeoples Performance
 Rewards are linked with attainment of Quotas and Desired Type & Level
of Behaviors can be achieved
 Performance based on Sales Volume in Product Categories, New
Accounts and Expenses
Principles of Setting Sales Quota
 Objectivity
 Based on Facts & Figures drawn from Market
 Simples Method should be used
 Easy to understand by all stakeholders
Uniform for all Salespeople by taking Competition Level, Experience &

Ability of Salespeople
 Achievable Limit
 Level of Definiteness
 Should be fixed in Terms of Goegraphic Territory, Money Value or Units

 Frequent Changes in Quotas can create problems
Procedure for Setting Sales Quota
 Schedule Planning
 Planning for Goal Setting Meetings

 Explaining Systems, Reasons, Benefits and Incentives for each
Salesperson
 Orientation Sessions
 Submission of Individual Goal Proposals
 Conferencing with Each Salesperson
 Discussion of Individua; Goal Proposals

 Territory, the Account, the Call Management and Self Management
 Volume per Month, Expense per Month, Gross Margin per Month, Market
Share per Month and Key Account Coverage per Month
 Written Summary of Agreed Upon Goals
Types of Sales Quota
 Sales Volume Quota
 Monetary Terms and Unit Terms

 Variuos Product Lines
 Sales Budget Quota
 Control Expenses
 Profit Quota: Gross Margins and Net Profit
 Sales Activity Quota
 Quota can be set on Activity Level instead of Final Outcome

 Prospecting, Generate Sales Leads, Develop New Buisness
Methods of Setting Sales Quota
 Quotas Based on Sales Forecasts and Potentials
 Quotas Bases of Forecasts
 Quotas Based on Past Sales or Experience
 Quotas Based on Executive Judgement
 Quotas Based on Salespeople Judgement
 Quotas Based on Compensation
Chapter 8: Recruitment & Selection of the Sales Force
Learning Objectives
 Hiring Process
 Challenges in Sales Force Selection
 Sales Force Recruitment
 Sources
 Selection of a Salesperson
 Socialization
Hiring Process
Turnover Strategic Position Analysis JQ & JD
Decide No. of Salespeople to be hired
Planning Identify Sources of Recruitment
Recruitment Generate Database of Candidates
Evaluate Candidates
Selection Select and Induce
Socialization Socailize
Sources for Sales Forces Recruiment
 Internal Sources
 Lateral & Upward Moves

 Intern & Cooperative Students
 Emplyee Referral Programmes
 External Sources
 Other Industry Sources

 Educational Intitutions and Campus Recruitments
 Advertising
 Employment Agencies
 Walk In
 Networking
 Web Sources
Chapter 11: Sales Force Compensation
Learning Objectives
 Objectives of Sales Compensation Plan
 Characteristics of an Effective Compensation Plan
 Factors Influencing the Design of Compensation Plan
 Types of Compensation Plan
 Financial Compensation
 Non Financial Compensation
Chapter 11: Sales Force Compensation
Objectives of Sales Compensation Plan
 Attract Quality Sales People
 Retaining Quality People and Reducing Attrition
 Improve Prodcutivity Level
 Maximise Sales and Reducing Sales Expensed & Production Cost
 Good Rapport between Sales Managers & Salespeople
 Better Company Image
Chapter 3: The Selling Process
Learning Objectives
 Prospecting
 Identifying Prospects
 Qualifying Prospects – MAN
 Preparing
 Pre-approach
 Call Planning
Presenting
 Approach
 Probe for Needs
 Convince the Prospect
 Handle Objections
 Close
 Follow Up
The Selling Process
It is a process by which a salesperson
 Identifies and Locates Prospects

 Separates the prospects from Suspects
 Approaches them
 Makes a Sales Presentation
 Handles their Objections
 Close a Sale
 He also Follows Up with the Existing Customers to Identify further
Sales Leads, Measure Success and Customer Satisfaction Level of
Current Products & Service Offerings
The Selling Process
Prospecting
It is a process by which a salesperson
 Identify Potential Buyers who have Need for Products & Services
 The Ability to Pay for it
 The Adequate Authority to Buy it
Prospecting is important for Effective Utilization of Selling Time by

distinguishing the Prospects from Suspects
Key Steps involved in Prospecting Process are:
 Define Target Market

 Generating Sales Leads
 Qualifying Prospects (MAN)
Prospecting
 Define Target Market
 Determining the type of Person or Organization which is most likely to

buy a Product or Service
 Salesperson can be helped by Researchers, Product Managers, Market
Planners and Sales Managers for Defining Target Market
 Networking
 Market Survey
 Generate Sales Leads
 A Sales Lead is any Specific Person or Organization that might Need a

given Product or Service
 Qualifying Prospects
 Qualifying means: Need and/ or Desire to Buy >> Financial

Resources >> Authority
 MAN: Money > Authority > Need
Prospecting
 Identifying Prospects
 Present Customers
 Former Customers
 Cold Calling
 Spotters
 Directories and Mailing Lists
 Prospecting Services
 Referrals
 Center of Influence Approach
 Endless Chain Prospecting
 Personal Contacts
 Trade Shows and Exhibits
 Direct Marketing

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Authors: Tapan k.

Panda & Sunil Sahadev

1) Sales & Distribution Management

Sales & Distribution Management

As a Composite Function of Marketing, it has evolved into key area of

Development of Sound Sales and Distribution Strategy

Sales & Distribution Management

Traditionally, marketers focused on Developing Methods and Practices to

Now focus is on the Process (Formulating Strategies and Methods for

 Sales Force Downsizing

Evolution of Sales Management

Marketing’s Early Development

 Marketing was the natural outgrowth of Production Surpluses

 Trading was the beginning of Modern Marketing System

 After purchasing goods, Traders resold them in other Geographical

 Town Economy: Medieval Economic Organizations in which commercial

 Agricultural Middleman: Early businessperson who purchased Staple

 Guild System (Association of Craftsmen): The Guild System provided

Evolution of Sales Management

Marketing’s Early Development

Bagman: Eighteenth Century Salesperson who sold Goods produced by the

 Bagman emerged in Late Eighteenth Century during England’s

Sometime after 1810, there developed Two Methods of Personal

 Horse-Drawn Wagons – called Wagon Peddlers

Evolution of Sales Management

Marketing’s Early Development

Credit Investigators: Supplier Employed people who evaluated

Commercial Traveler : Credit Investigators later on started to sell

Greeters: Supplier Employed Sales Reps who Solicited Business from

Evolution of Sales Management

Marketing’s Early Development

 Drummers: 19th Century Salespeople who journeyed to merchants’ places

 They “Drummed up” Sales for Manufactures and Wholesalers which

were shaped like Drums

Evolution of Sales Management

Selling in 20th Century

 From Production to Sales

 At first, Selling was overshadowed by tremendous growth of

 Production Surpluses resulted in Re-emergence of Sales Era until WWII

Evolution of Sales Management

Selling in 20th Century

 Traditional Sales Approaches

During the “Modern Sales Era” Traditional Sales Function called

 Salespeople’s behavior was considered the Key Ingredient in Sales

 There were Three Variations of Traditional Sales Approaches:

 Stimulus Response Theory

Evolution of Sales Management

Selling in 20th Century

 Traditional Sales Approaches

 Canned Sales Presentation

 A prepared, Structured Sales Script memorized by Salespeople

 Stimulus Response Theory

Evolution of Sales Management

Selling in 20th Century

 Traditional Sales Approaches

 Salespeople has to lead Prospects through various Steps in a

 Arthur Fredrick Sheldon Selling Course

Identifiable Stages before making Purchase Decision

 AIDA: Attention, Interest, Desire, Action

Evolution of Sales Management

Selling in 20th Century

 Emergence of the Marketing Concept