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    Sales and Management Textbook

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    © All Rights Reserved
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    36 views55 pages

    Sales Textbook

    Uploaded by

    Mitanshi Mandowara
    Sales and Management Textbook

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 55
    1 Sale and Ditton Monagemet oa SALES AND DISTRIBUTION MANAGEMENT ecconienaniaciansces oS SYNOPSIS ‘A. Sales Management ~ Introduction Role of Sales Department Evolution of Sales Management Interface of Sales with other Management Functions Qualities of a Sales Manager Sales Management ion Channels 'ntegration of Marketing, Sales and Distribution Sales management o sales force personnel, La Management ion to the means management of S Promotion, marketing ing, and product merchand; 'vely simple before Meneesnet EY BMS.) (Sem_vy ng the goods was no problem, including manufacturing and s rather Wiual and more attention was pat rather than the marketing. protlens The the marketing problems was renter only Which started in England and inimeig ly The Ame: wrap Sn nding out sorb the inc tured goods. This gave a lot of With the ‘increase in production. Iwas required gore aee where the scale of ‘oper more land, labour and capi {orm of organizations rations wa There were bigger organi h aniz required more delegatio sraniat i manufacturing and ater areas Thus te ces renee corporate as As the business activi meaning of the term business operations. Earlier sales ma the direction of the sales force pe “sales management” has a much includes all the marketing. a marketing research, physical di in fact, is a vital subsystem of marketing management dispensable part of marketing management. to interact with the customers and marketing plans, strategies and pol management. ity became more complex and dynamic, the “sales managem t” changed due to the changes in mnagement was solely concerned with sonnel, However, at present the term broader scope and significance as les such as advertising, sales promot ibution, pricing, etc. Sales management, It is an as the sales force is required luence them to purchase. The jes are implemented through sales Definitions of Sales Management 1 ‘According to American Marketing Association, the planning, direction and control of the personal a business unit including recruiting, selecting, tra assigning, routing, supervising, paying and motiv apply to the personal sales ~ force.” 2. According to William J. Stanton, “Sales Management involves planning, implementing and evaluating sales ~ force activites wi ines set by the companys strategic marketing planning’ ement is a broad te Judes managing the sales force and organizing the sales efforts. It is an art as well as science. It is BE art because managing sales force requires certain skil which ae pron possessions of managers. Science provides the knowledge & art deals wi 's Management is ing activities of ng, equipping, ing, as these tasks 3 ar sie ‘ience as it f= ledge and skills. Sales management is science 26 1 Pac gs managing the sales force and f the basic objectives of sal he application ipa tes use of scientific prin ples for m Jeveloping the sales organization. sment include : rag achievement of sales target Growth in sales volume. inreasein Profs. Increase in market share Effective management of sales force. Effective management of sales territories. je nagement oni oR pn wh ed actical application of sales techniques and the management ofa firm! Biles operations, The objectives of the firm, relating to sal volume, market share and profitability, are greatly affected by the efectiveness and ciency, with which the sales function is, managed. The sales ‘nanagemént ebjectives Of a business frm, generally telate to thereas > Achieving sufficient sales-volume, > Proving sufcentproftand -xperiencing continuing growt Gancill, eeive, of se cee eer ea sales-functions, in integrated manner. These objectives are to be expressed in measurable and quantitative terms, and should also be realistic and achievable. The setting of objectives should not be based only on the judgment of the top management. Rather, it should be formulated and finalised, with the involvement of the sales-force, at the grass-roots level [ROLE OF SALES DEPARTMENT _ Tn any organization, the sales depariment plays a pivotal role in the success of the business. The unique and important role of sales department 's to bridge the gap between the potential customer's needs and the Products/services ‘that the organization offers to fulfil their needs, sanbany’s success depends upon relationships of the sales department with other related departments of the organization. The sales department’ mana duties to achieve desired resulte as follows 1. Goal-setting ‘The sales and marketing division sets individual sales representatives’ quotas, as well as the overall goal for the Company. To achieve sales goals, Wereates bonus and commissions structures ary division uses past sales ger has to perform various functions and The role of sales department is explained ea and inna inwh Bilin estimat one (TXB, esignin, te Which produ, 1am. Sal ‘cls will sel Il sles Salesforce re cisions inc} Is decisions on the compos ion of a) ete. Some b) ning Sales force Strategy ; = The sa understanding the was i Process. It has It helps: achive stark pcre Sales Force ; pasis, product b: he sales force SOF customer ‘bas Th Tan a y when the products are ly unrelated ee management ent and selection after proper job a sales manager has to establish sa personnel to €3 ‘of people as well to consider the s ies before assigning the same ote ond Duo 9 tary and non-Mor bs ti hy renee Performance : THe ss seco the same W n then measures arn anon ais peer corrective actions : a ie ‘touch wil the customers. a El "Bafzeting managers Bet In) 01 pis aon ‘the feedback obtained from ter" rai ne developmen tc or Customers. recommend serving, of OPP Pi ent services. adding new ones to the company’s MIX: e s den partment services oF 248 for deciding where 16 Company should sell one at te pices should bee This inelBee aking choice of inter 3 distributors or retailers. such as wholesalers, 4, Sales Forecasting Sales manager ha ‘American Marketing Associ 5 to anticipate/ forecast the sales. ‘According to iation, “Sales forecast is an estimate of sales, in Aertary of physical units, for a specified future period under a proposed sree) jan or programme and under an assumed set ‘of economic and other forces out the unit for which the forecast is made.” ‘A sales forecast is an estimation of sales volume that a company can expect to atain within the plan period. A sales forecast is not just a sales the act of matching opportunities with the marketing firm's share in the market predic Efforts. Sales forecasting is the determination of a under a specified future ‘Thus sales forecasting shows the probable volume of sales. 5. _ Sales Budget Sales budget is yet another critical area that Ct it the sales manager has to take care. It includes projecting the achievable sales ee on analysis of market surveys and trends, and historical sales data, salepersons: eels, Sales budget forr ir iget forms the basis of a business plan because the level of sales revenue affects practically every aspect of a business. 's practi ve ly us les department takes responsibility te. se atom |. The division is pro: a sasrel th surveys and special offers and an sagmeting Problems that might cause the company to lose to lose EVOLUTION OF SALES MANAGEMENT a ing is as old as human c t0 sell axes, swords, buttons, blades, who were the enterprising trader destinations such as India. The b various phases of evolution and development over t ally selling had a purely transactional appr in which goods were exchanged for goods. It was a concept of “buyer” and “seller”. As there was increase in competition the concept of “customer" evolved. i has gone through re centuries. foach i.e. barter system During the early years of 1950s selling was mainly of consumer Boods. Companies such as Unilever, P & G were the pioneers in selling 7 Soles and Distt Management ae bcs, ns, ec. In 1960s, the selling of industrial products stares oP owl gathered speed. The evolution and development eb gelling continved: In 19705, gave rise © non-profit and societal selling. In 19805, ‘service” started to get recognition and it prospered during is The development process led to the development of the concept of ‘customer’ andthe emphasis was on relationship selling ipa 19 loping and retaining customers. The main goa se bela customer tyaly trough sales management and customer service. INTERFACE OF SALES WITH OTHER MANAGEMENT are icable to sales The basic elements of management are aptly appl management in all their aspects. Interface of sales with other management functions are as follows: 1. Planning the first and basic function of deciding how to do things, who will do it and when. Sales planning involve strategy, setting profit- based sales targets, quotas, sales forecasting, demand management and the writing and execution of a sales plan. A sales plan is a strategic document that outlines the business targets, resources and sales activities. It typically follows the lead of the marketing plan, strategic planning and the business with more specific detail on how the objectives can be achieved through the actual sale of products and services. 2, Co-ordination Coordination very important function effectiveness. Organising starts from coordination inter departmental and inter in the organization wholly, partially, on Personal matters. it helps in utilising the efforts Protea’ force 0 the maximum level through leadership. guidance, ‘motivation, supervision, communication, etc. ‘ 3. Controlling and taking corrective actions to control system should hel Ip to determine the level of sales budget, sales aoe elietsicle a cui channels, organise an effective salecforce &,tePortng, statistical sales, stock conte , eon Stock control system, Performance, and periodical testing programmes luotas, review and select establish a system of review of salesforce p rer Sale & Distribution Management (.Y.B.MS. 4. Motivating ince. Motivating and encoura ging sales force is important as it br ta in ee of human poychology seeded to aise which is essential for sales { salesforce will be able to achieve company's goals. oer 5. Reporting Sales reporting include the ke "y performance indicators of the sales force. The Key Performance Indicators indicate whether or not the sales, Beas being operated effectively and achieves the results as set forth in sales Pea tt ea able the sales managers to take timely corrective actions and also allow senior man oes jor management to evaluate the sales 6. Organising Organising plays an important role in sales in collecting the information, delegating the authority and duties to the sales force. It is important as it assigns responsibility to the sales force and also of much importance to develop cordial relations in the organisation. 7. Budgeting A sales manager is responsible of planning and controlling of activities in the organisation. He has to look after the department budget in smooth flow of activities. tructions to the salesforce to carry out the work in a systematic manner. It gives guidance to the sales force and helps them in completing the objectives on time. ‘Sales management includes understanding ‘and monitoring and explaining market trends to sales personnel nanagers provide direct supervision to salespeople and are responsible for Alespeople. Teaming and implementing any and all company sales methodologies and initiatives. “the: cales manager plays an important role in an.organlzation. He must understand and clearly communicate sales budgets thelr significance ur uhat they mean to each salesperson. The base level sales managet at Sales people look to him for operational guidance suciee There ae ant ain qualities of sales manager that are essential (Or the success of sales in an organization. re Sola ed Darton Mone! vine qualities of sates manager 272° ee sane iness, toleration, 4 aici qualities such as sound neath ale pie GO health is an essential requirement for wo jin 0a fe “etemanagement includi sales manager oe and i he stress in sales mar teraton and potential t0 for Np the sales manager 10 deal wih Faas rs case! lan ing time. * ren i ea led as mental charé ‘ ? They can also be call retcnae “ walities such as leadership, mat sles concerned with the 4 person should posses Pete sales. He should act as a rol vee working with him or reporting Pi ‘es for handling the team work. 3, Positive Attitude Qualities such as positive attitude, self-discipline, and honesty are the uch ae tired in a sales person. The attitude of & sales ie crunt factor which helps to know the person. AN manage arive will result in success in the Orgénization. Self ist a aefpomant quality the is required in a sales person, Apart from Choresty, as srong ethics will lead him to be a role model for others. Leadership by Example ‘An effective sales manager should work along with his team; he should be out on the sales floor with them. He should lead by example, make them accountable, motivate them, and get them out of their comfort zone. 5. Intellectual It includes qualities such as receptiveness, analytical abilities, ee enter ra good sales person should have a 100d listening and communication skills. He should be approachable and Ferorelia ps cotlo Dc tomers andcthatater oe have good observation that will enable him to diferente between the go sales operations or organizations. He should hav rity of words in order to make his coms S See -ommunication effective. rent / Technical and People Skills It involves manager ment I Management sl e controll © iy of understanding which is Yery hs se le model and ‘motivate the other sales ® He should possess leaders! technical s| and people s| aes Palit apply to organization, moan and - They also should have some technical skills like seminating the '0 sales, The companies 8 system through ibuto1 the company. Apa buyer ri reference for Business managing ing challenging. Managers should focus or th the help of CRM software, 6. 18 tO. sophisticated "natives and high demanding les person uses a combination of selling skills, ability to conclude business, create and appro: customers, prod Sek and Diaritin Menogenent ied customers. Apart from t oe 8 , skill development and training is 1g is essential for the their own management development centres for training, employees in professional sales management. [STRUCTURE OF SALES ORGANIZATION Medium and large sized companies expand their sales organization structure in a specialized form to increase the effectiveness of the sales force. The criteria used to design the sales organization structure are meeting customer needs, abilities of sales force, nature of the product, number of the product, sales co 1. Functional Sales Structure The functional sales structure is imilar to the corporate functional Structure except that, in this case, different functions are confined to only tpatketing and sales. n this structure, the marketing research manager and the promotional manager give their inputs or feedback to the arcs sales ‘manager who conveys them, after his analysis, to the salespeople. ferme abet (operations) may sometimes interact directly withthe sles staff This structure is quite suitable for sralles organisations which may be selling only one product, and come functions, say, marketing research and promotion, can be combined in ane manager. Functional Organisation =) Advantages ona Sere Salesforce. a) The effe ness is red and market ie asi Segment, "creases the company's Product sales pers sper been has and di and piineduct and instan is to mov e fro manag: ae management to cistner leeds of the customers. i c cues) aaa (Comal = ) ree) tion for each produ the product g efforts ct from the only on the lines and brand oduct rE Sales and Dteutn Manatenen! rer Disadvantages + a) More than one salesperson calls the same customer leads to ©) Too many cal 4). Lack of product spect Higher costs due to dupli customer accounts Coordination required when ‘nore. sales: feps Raven tesa geography/accounts. 4, Market Specialisation Structure Market spec es organization is desirable when the customer is classified by the specific type, User industry, i this structure tl out all products but for certain spec! Pm be government, commercial ete: ‘Dealers have different buyi practices and preferences. In the recent years the use of marketing Epecialisation is increasing. Market Specialisation vetion of effort within geographies and Advantages a) The sales and marketing efforts are organised to meet the needs : of specific customer group. ) Management i are control can be strategically allocated to different ©) Sales representatives ki now the ni it oe he needs ofthe cima and build Disadvantages : a) There is du b) High selling cost. the local sales eff, mana te hans aes Stles Manager fornia >) ey (GED = mae) (Ress) pat vec) (very) (a level ' for ing the Quick response to local service and conditions. They ©) Low geo, f) Low cost. Disadvantages : customer service, ical duplication, ©) Territory siz Hl revenuefopportunity across geographies ing. in’ uneven 7 ar 5 other organlzation’s ue ; bination or hybri ie 7 various organizations. ey aot ee rat cn n hey com geogr ae specialisations. {he bass spacalaton varies fem company 10 company bu this SyPe Tee ett caion s needed for the firms to remain competitive a) mpany on the brand of customer's choice. He only deals with the shop t hat he ges the product on time at the place that the ‘Most convenient to him. This is one of th © most important functions of distribution mn _management is I Movement and and place util Pree cludes. the broad urangel et activities efficient movement of finished Products from the end of to stra, and in some cases it also includes the ‘ovement of raw materiale f f i tem fae rom the source of supply to the beginning of he management of all activities that ‘co-ordination of suy ply and demand in Satisfaction of Marketing con of customers. The of new goods, MENTS management is as fol Customers cept emphasis distribution eh: ing of Consumers at the right as changes in their : s through em ership. ing improve: income and transfer of own: 3 creating place ul role in increas place in ri 4. ity utility. It plays an important ugh delivery of goods at right ht quantity and right time. Communication Distribution acts as a Producers provide informai channel members. They als competitors and environmen’ 5. Employment Ik between the customers and producers n about products, price, promotion through 30 receive information about the customers, changes from channel members, The function of distribution creates employment opportunities, The market intermediaries work as direct and indirect sources of employment. Consumers are supplied through innumerable products by. different producers. Thousands of distributors, wholesalers, retailers, agents, brokers, etc. involve in supplying products 10 consumers. It can also provide jobs in transportation and warehouse. 6. Efficiency Producers produce limited type of goods in mass quantity, but the consumer den ds different types of goods in sm: goods are produced in sma quantities: When the quantities, they can be obtained at a lower price. Distribut Ips to satisfy the consumers need by supplying variety products of different. producers. This achieves ney in both production and distribution 7. Product Planning & Pricing Channel personnel provide advice and suggestions on new and existing products. They help in test marketing and also in positioning 9 ‘Soles and Distbtion Managernent Ledas i dd and which products to a products against competitors and suggesting Pr vinich to remove from the market. nee! reserve and oor ries themselves make arangerets (0 keep ee ane jot_ma ck ‘af goods, The. producers need fot, make aramesees Oy tranagement of distribution centres and wal epee rot do anything except remaining bay in ieee Seine rmediaries and financial help come vy ‘ ena ‘of production. The role of finance is also decisive in ‘mobilising other means of production. )LE OF DISTRIBUTION a 3 *£ The ole of distribution is through channels or intermediaries ‘Channels or intermediaries make possible the delivery of a product to final consumers whenever and wherever they want. “The role of distribution is much more important for consumer goods, particulary FMCGs, than for industrial goods. All industrial inputs oF intermediate products are sold directly to the industrial consumers. Distribution provides access to the goods in remote villages too. tribution creates time, place, possession as well as form utility. The role of distribution can be understood as follows = 1. Business Expansion stribution enables to expand business as they help in supplying y products on time to consumers which results in customer satisfaction. Expansion takes place from local to regional to n: levels 2. Provides Employment Opportunities Distribution provides employment opportunities to. many T ite 'y_ people. They are provided job as suppliers, agents, retailers, also get opportunities in areas of wareh Financing Finance is an important part in smooth flow of prod. ivi helps the intermediaries in warehousi reo ee ae sin warehousing and supplying goo i 4. Customer Satisfaction H pelviogepeds on Wn Distribution emphasises on custom Big ea tion ey uustomer satisfaction by eh 'y providing goods 5. Communication Distribution acts as a link b eat sa link between the cust binaics Meanie information about products, price, promo saan nee Th, also receive information about the mental changes from channel members ional and international wholesalers, etc. They \ousing and transportation. customers, in: Of goods closest credit, to the marker, W-UP on competition INELS ‘OF DISTRIBUTION CHAN! age i channels hep in the smooth How of goods and services. sort eee the producer and the assortment of and services generated bythe producer and the a beta epics '2 number of limited variety of goods, roducers typical : : y of goo on cnsumers usually desire only a limited quantity of a wide variety lagement, he complaint or damaged stock from the i ‘of a company long-term importance in ensuring the presence and success of a » in the marketplace. It ensures that the product gets wide distribution and it anges in customer preferences etc. .mpany in thelr areas of operation Tr ea aaa The evolution of marketing channels can be understood as follows : © In the past, all the products produced on the agricultural farms ted in the vicinity by the farmers. He would obviously sell his produce within the limits of his physical reach. © Thereafter, due to the Industrial revolution, there was large scale to maintain price stability in the market. manufacturing and hence the need to reach out to more consume Not. only also materials, machinery, equipment etc this added new dimension to distribution manufactures into picture. between the © Then the concept scale ensured hi and thus traders came Many and sell in their name. This help: producer and the intermediary. i feral ive regular feedbacks from 6. medi he est source 10 fei © The concept of ‘selling’ led to m, k helps in impr in the form of wholesalers and retail inding became apparent as economies of levels of production and. inventories, ‘ant only for the ‘place’ part of the independent intermediaries rs. 2 \d execution is a team effort nas athe’ Planning an ere The distribution management the physical movement of oda 4 - . ugh marketing channels. The Tit of asks 6 by the sales management and is sed in cost ioc 1 1h “Katribetion management with the help of market f his customers, G: mation became the norm, the market. : in_ promotional sales management task is to participate oti a im ee the role of distribution will be to organise and participate Sand meatier ‘hn faire exhibitions. Making promotion successful in terms of set ‘ated databases and interactive technologies became a , exhibitions. Making promotion sue big support to pursue this strategy Oe rencamiee ; : However we recent marketing concept is “interactive marketing” led trigger-based or event-driven marketing is a marketing uses two-way communication channels to ith a company directly. A new form of di have evolved duc is retain stocks up to norms. : nt’s task is managing institutional business, tion channels, his and thus marketing has increasingly taken place ine through email, social media, and blogs. This has f channels or a concept called “zero channel’. fon role is make the customers call productive. The sales management task is width and depth of distribution, the utors role is focus on slow movers, ensuring high I more than competition. Al the above tasks show the integration between the marketing, sales and di ction. Best results can be achieved if the marketing, which are sal tion plans and strategies are perfectly coordinated and 1. Explain the role of sales department. — inseparable. Sales management plans operations and di executes these plans. They have influence on each oth deliver high customer service. ion of ensuring that 2 Discuss the evolution of sales management nagement serves a primary function of ensuring that 2 (othe customers within the ange 3. Whatare the qualities ofa sales manages? and av of product / Explain hedevelopmentinsies manegement session utility to the customers. plain the structure of sales organizaton es tre Pe ee a ear & What do you mean by distribution mane ion of company's sa 7 Expaintherlea intermedia tegration of marketing sales and distibee 9, _ Explain the evolution of distribetion chara ene What is the role of distribut ATY- BMS. Sale & Distribution Management (Sem. —V) Sales & Dj fon Management (1:¥.3 2 ay Meakst Analysis 6 Selling wre =e Ain i Markt Pte SES Market anal Market Size Market Competition ich characterise Market Profitability the market : 1. Market Size — SELLING Tl of mln nen te ce = market size, which is measured in terms of the total sales. Total market a Se size consist of the size of different sub markets which understood properly to know the potential or future growth possibilities. 'nformation on the market size can be collected through sources such as government, trade association reports, Sales Forecasting Importance of Sale: Methods of Sales Fi s Forecasting, industry, sales tax department, etc. ‘orecasting 2, Market Potential Sales Quotas The current market shows actual market size whereas the potential Types of Sales Quotas market Factors Determining Fixation of Sales Quotas Sales Territory - The potential market indicates of the market. Example: Cadbury lat affected the growth of sales, later it Assigning Salespeople to T ns / Advantages for Si he sale of chocolates resulting in more growth of Cadburys in the market. 8 sometimes, a new use or a new user group or a more quent us Process of Selling an almost suddenly change the size and prospect of a re ae Methods of Closing a Sale 3. Market Growth Reasons for Unsuccessful Closing Theories of Selling The current size of equally important. Preser without market growth neither Hence both the size and. groweh im attractiveness, ‘ eis 4. Market Competition The important but the growth of the market is is possible through | larg the sales nor market ence between Consumer Selling and Organizational S Difference hare may increase. tant for the market I factor in the market 'e company should seek \d level of appli structure, cost eee > Who are the Competitors Most suc Cessfi and the r the market b) Product cost or cost structure. ©) Selling price of the product. Profit is measured as pf = p—c Where pf = gross profit per unit, P= selling price of the product € manufacturing cost plus marketing or selling cost Of the three factors, the company has control only on the cost. Selling price partly depends on quality of the product and more on the iB Price partly depet q Pl market factors like market demand, , price elasticity of demand, etc. except for niche products 6. New Trends and Developments New trends and developments are a very important aspect of market analysis for understanding future course and direction of the market. Ths fhas implications for a companys future sales planning, stategy and investment in the market. One of the new trends in the FMCG packs to attract more customers, to indues no 's and consequently increase sales. os rink market with the introduction of flavoured ice tea etc Such trends or devel market is availability of smaller I as well as frequent rend can be seen in pulp in the drinks sents in the market give important ind sree which should be taken into accou! ‘various products! brands Mart Avis Sei wor 2 [SAUBSFontcaSTING, ee) ing is the process of a company predicting what its forecast is done for a particular period of time in the near future, usually the next fiscal year. Accurate sales forecasting enables a company to make informed business decisions. Sales forecasting is the process of a company predicting what its future sales will be. This forecast is done for a particular period of time in usually the next fiscal year. Accurate sales forecasting pany to make informed business decisions. Sales forecasting for established companies that have been operating for a few ‘years than for newer companies. Established companies have years of sales records and can base their forecasts on that past sales data. Newly founded is eas ns ‘According to the Robert Albanese, “The sales forecast is one of the major planning premises in business organizations. It is the result of numerous assumptions made about the external (industry sales, competitors actions, for example) and intemal (costs, technology, personnel, for example) environments of the firm.” ‘According to American Marketing Association, “Sales forecasting is ate of dollars or unit sales for a specified period under a proposed ‘marketing plan or programme and under an assumed set of economic and other forces outside the unit for which the forecast is made. The forecast may be for a specified item of merchandise or for an entire line. ng to W. J. Stanton, (in dollars or prod and under a predet IMPORTANCE OF SALES FORECASTING Sales Forecasting gives insight on whether a on wh company should expand or no. It also gives information about cash flow, and the abiliy to effectively manage its resources. Without forecasting, a company would be tunsure of what inventory level to maintain, unsure on how it should allocate resources across the company, and it would have a hard time predicting future success. Forecasting sales isa cr helping a company alloca ig is an estimate of sales future period of time pa business practice, because in ad resources effectively, having this What a com ww investment Maret Anal Selig rrr consultants or experts who share their expert views. The team meets at a consensus forecast. Each member prepares and presents his or her estimate. They are discussed together and a final consensus forecast is reached ii) Delphi Technique This technique includes forecasting panel consisting of specialists in the fi to the expert opinion technique. But in this technique the panel members do not meet together. Opinions of others are sought ) through a questionnaire. The planner designs a questionnaire suitable that ists of appropriate questions relating to future demand or sales and administers he panel. The completion of the forecast is in two more important have to collect mation and arrive at the final decisions. a y Consumer Survey method Sales forecasting methods vary from si analysis to techniques. The methods a techniques 2. Quantitative techniques 1. Qualitative Techniques These are subjective or judgement personal assessmer led into two areas techniques based on experts, consultants, etc The five methods are i) Expert In this the sales have in depth knowledge abo The people can be senior the company or outside consultants or industry expers 1g teams is made of company managers and externi mark in the right way and get the rere Soles & Dis Pisin Management FY.B MS) (5, em) 0 called as grass Toot a ea PProach, This iS ope of the Company, Each salesperson at a ae territory. These individual id the company forec ast. Ea mies ‘With the’ area rhatagerlbens Prepares the final forecast fo, sales forecasts are aq, Salesperson discusses hy ded up to bu submitting and the sales manager This approa ich is also called as st the sales forecast At ‘each levels, each person makes estimate based on ther understanding and analysis of the market, demand pattem and likely sale All these estimates are then sent to corporate sales manager who prepares the final forecast based on average of these estimates. In este nt differences between the two estimates, it is given back to the persons far review and revision. 2. Quant /e Techniques These are statistical or mathematical methods mostly used on time series analysis. The method ranges from simple past trends to complex regression analysis and computer models. The following are the methods as follows : i) Moving Averages Moving averages is a smoothing technique of time series dala, which it is difficul data especially of sales fluctuate every year due to whic find trend. The wend becomes clear using smoothing esa Saeae done through a 3 year or 5 year moving average: After calculation of his Te ee more clearly and the trend line can be extended to fut years 10 achieve sales forecast. The forecasted has to decide whether t Mee a 3 year or a5 year moving average. The more the annual sales dt fluctuates the more advisable is to have a long average period Market Analysis 6 Selling ii) Sales Ratio Method In this approach the past trends in the sales ratio of the company are projected to the future, The method is also called as growth rate method. For this method time series analysis of 5 years will be a suitable data. It is more suitable for short term or medium term projection. It can be used for long term for a time series of 15 years. The data should be smoothened as 3 years moving average gets accurate forecast. Market Share Projection Market Share projection relates company sales to total market sales and therefore also reflects the competitive level of the company. Market share can be projected based on time series data, either actual or smoothed, and the companys sales forecasts may be made on the basis of ‘market shate projections. In this method, the total market or industry sale has to be separately projected or taken from some other source to generate company sales forecast. iv) Regression Analysis B Regression analysis is purely a statistical techni {or forecasting purpose. This assumes a set of relationship between 2 set of variables which are interrelated or closely associated. One of the variable is dependent variable ani 'd one or more independent variables which influences or explains chany Bes OF Movements in the dependent variable. [SALES QUOTAS ique commonly used nae eee Es volume and selling expenses, The t of the company is divided int 0 : sso, Ach teitory manager dives the wen HONS ad sales Salesperson, distributors, dealers who are [irs OF sates QuoTAS ES QUOTAS = OF SALES QUOTAS the terri attached to, targets are usually OF Volume, At the salespers Sean ed ted into units be fixed in different ways, ) of be Necessary when a ing cost. K is that the sales manager and’ the Cost of manufacturing and therefore Some companies. also entertainment Profit quotas is that some salesperson may travelling which wi Companies use profit quotas to « managers and salespeople that profits are important tha and they should focus on profitable sales, impact on sales, aver ned ae convey field sales n the sales volume b) Expense Quota As a sequence to margit quota trying to regulate tr Expense quota is usual sales more can be the s Jota, some companies also fix expense 1B telephone calls, lodging and food fixed as a percentage of sales so that more the 1B expenses. The drawback in expense quota is there are variations in territories relating to customer focus, resulting in variations in travelling, lodging and boarding expenses of sales person. Sales quotas should be administered intelligently and with flexibility as there are differences in product mix required by customers, market potentials and abilities of salespersons Sales managers should bring tothe notice of salespeople that the expen quotas are made to make them cost conscious, allowing the reasonable expenditures, and not allowing to make money unethically. ell 2. Sales Volume Quotas vo Most of the companies have sales volume quotas salesperson, distributors, retailers, geographical areas, Specific period of time. In order to have proper contol sale volt {quotas are set for smallest marketing unit. Same appr Manet Anal & Sling rrr = sales volume quotas for products for a specific time period. Annual sales quota volumes are divided into quarterly and monthly quotas. Companies set sales volume quotas in rupees or dollars sales volume, unit sales volume, point sales volume. a) Rupees or dollar sales volume When the salespeople need to sell many products, it becomes easy to manage if the quotas are set in rupees or dollars. The reasons are : © It allows the analysis of selling expenses to sales, expressed in percentage or ratio © The sales quota expressed in lacs per year needs to be divided into quarterly and monthly quotas. Unit sales volume b) There are three situations in which the company can set sales volume quotas in units i.e. numbers, tonnes or litres. The situations are as follows = (© When few products are sold by the salesperson. Example : While selling the fans to customers, the company has set the sales ‘quotas to branch managers and sales person in rupees and metric tonnes. ‘When the price of the product fluctuates rapi salespeople achieving the sales quota easily prices © When the price for understand the unit sal Point sales volume ly resulting in the due to increase in each product is. hi igh and is easy to les quota. ° when the co asking the sales people to. sell relatively to the profits, 3. Activity Quotas Activity quotas are s important job related acti Performance tar when tl nnon-sellin B activities but also infonmenieter NG activities such as. gettin rae The process oer 2s, Seting market H deciding the activity s Defining the important activities ut these activities, these acti inding the time to car arty 0 © Deciding the priorities for . 37 Market Analisis & Selling 4. Total Production of the Year ‘The total production of the company in a year also plays a ke} jole in determining the size of sales quota. In a particular year, the 85 a production is high then higher sales quota can be set for the salesperson ious because good that are produced needs to be sold, On the other hand, if the production is normal in a particular year, for each salesperson moderate sales quota is fixed. 5. Extent of Competition If the company is facing high competition, the sales quota fixed is low. The intensity of competition is inversely proportional to the size of the sales quota. It means that the companies enjoying lesser competition can have large sales quota for each salesperson as there is possibility of large volume of sales. 6. Opinions of Experts Experts in the sales field are of immense help in determining the sales quota. Dealers, agents, consultancy firms, and other agencies that are ae faite eee in a position to know the kind and quantity of Searle ol evant ore ee POH aire quota for each salesperson. Territory sales pot in won sales potential can be estimated from industy sales potential y and using the companys territory share. In case of large ies like a metropolitan city, such Inds Asociatons or Chambers of Commerce, |" ne Procured form ce. 8. Salespersons Estimates yportant US Monitoring P of personal in their territory wel source of providiny ce of providing estimates. However care should at they do net 's. This can happen becat Thee performance. However,» scope his own territory is a use SALES TERRITORY to ah iales terton (© salesperson, boundaries, Howeve of the buying powers ds wey can be called as economic status the area, living habits, etc. Accordingly a salespersons review a useful Weleo Y Consists of exist The tenant And potential may or a sales ind pot 1 affect while estimating the sales quota for th policy , high quality goods, hig i, larger sale be set for individual salesperson. Thes the demand for goods and services and alt les person. to increase \crease sales quota for each Saks 6 Dirty wre oe. ton Man - in dfn pre ery “nen YES) Cm. say anus 6 Slit potential) can be ul Kani 1) Marl Ard ential) can For example, in sellin mt customers, aalestertory business potential (OF marke’ POAT te territory. Eacl al) for each salesperson can m ainly to relative: s, friends les quota (or sales 80% territory. The Use geographic eeOB=Phic locations, Simieny Aan Ppl, wi esate: oe run share of make potent ot ety ns, all ee ,, monthly, Eititories are very few. In ae examples. of not using georsapiet See eerie ca cared withthe respective sales 63 a phi a salespeople customers, ganizations, it is beneficial and yearly basis _ to allo yerson. consisting of present and potent) carne evaluation of the ee only with respect {0 or advantages for sett of selling expenses, cust eae OF revising sales tenitores ee et UP and subsequently reviewing. salespersons responsib ies can be clearly companies to establish sales tetories eM Mai" Feaons fa 4, Improves customer FECT ate time with present and 1. Increase market or customer coverage When ihe erate problems, needs etc. and to find : tial customers, t0 UN Z H time a piell-designed sales teritory allows salespeople to spend suficien ae claiondhip.knprovess The custiree Wleite: ease ime with present and potential customers, which improves the marke: developed over a long period of interactions between the salesperson “ coverage. This way the company does not lose any business to is the buyers. These interactions and regular visits are possible because eac! competitors. In fact, better coverage of market, results in gaining salesperson is assigned a group of customers: ’ Competitors! customers. Proper market or customer coverage is possible Some salespeople develop collaborative or partnering relationships the company sets up the territories intelligently and assigns its salespeople with a few high profit potential customers, for mutts! benefits of buying carefully. and selling firms, The selling firm becomes a sole or preferred supplier, as Sales. territories. should ,be large enough to. ensure sessonable afesifechalkocaterm mutual Dele est i aeaetiag between the buying ork te calecfoece bat small enough to see that allexistng customes Ad Mella is tots a ea block of such a and prospects are visited adequately as needed by the customers. The field partnering relationship. ti set managers can contol the activities of salespeople, ifthe sals 5: Increase slesforce effectiveness a aaa ct up properly. Well» ss. ee 2 wee 8 uctuations. a Risk and uncertainty s unpredictable. brand is important a Company. table. pr int role , they ‘Agents play an importa h act as a catalyst for product promotion or market development. Agents are cess between ae and the buyer ig a ion process betwen salesperson and the the regional They are regulated by information or trading blocks. buyer 6. Relationship building 7 a] anisms, etc, 3 aie " '8 Is sale to nship building is long ter [po Sa 7 Marketing intelligence skill Te selling? Explain the process of useful, the methods of closing a sale? 8. It follows “cash and ry” | Explain the reasons for unsuccessful closing. schemes. Cash payment ison Discuss Stimulus Response Theory. spot. Discuss the Product Orientation Theory Discuss the Need Satisfaction Theory. Selling lluiersstateasestannacroses Sale closes on the spot as the Payment and delivery takes place simultaneously. 10. They do not require after sale service except for consumer durables, Person rendering satisfactory sen y after sale, Information on. the DIFFERENCE BETWEEN NATIONAL SELLING AND INTERNATION 3 ‘an ‘be collected through sources such as eports, industry, sales tax department, etc. —— atfects pro SELLING Teariona feasting enables a company to make informed. business NATIONAL SELLING INTERNATIONAL SELLING 4 Mag 1. National Business id limited to |The international business i jg Joball 5. method is also known z n is restricted to | The competition i50n global es The <__ manager makes hse imate. atl ‘or local or regional A Ss ee eS ime series data, lave Taunt’ the sales goals set by th ny for ied 3, The national is | The — international busines, Cerin duration ot tig Se company for its marketing units for a conducted in local currency | conducted in foreign cur — is defined as Sales Value ~ Cost of Goods Sold which is stable. implies__the _exch 6 itbution Channel Management wore DISTRIBUTION CHANNEL MANAGEMENT SYNOPSIS ‘“Wistribution Channel Management of Distribution Channel Need of Distribution Channel Need for Channel Management ‘Channel Partners and their Functions Difference between Distributor and Wholesaler Choice of Distribution System Distribution Strategy actors Affecting Effective Management of Distribution Channels ~—thannel Conflict —

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