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Session 1 & 2
• • •
Sales Management Objectives Theories of Selling Sales Function
Finished goods in inventory Distributo r Retailer
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Sales Management is defined as ” The Planning Direction and Control of personal selling Including 1. Recruiting, 2. Selecting 3. Equipping 4. Assigning 5. Routing 6. Supervising 7. Paying and motivating as these tasks apply to personal sales force” -AMA
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Sale of Products/Services Add profits to Business operations Fulfill social obligations
Organizing planning and implementing the sales efforts to achieve corporate goals related to market shares, Sales Volume and return on investments (ROI)
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Theories of personal selling
AIDAS Right set of circumstances Buying formula “Behavior Equation” Theory
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Attention Interest Desire Action Satisfaction
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Right set of circumstances
“Everything was right for that sale”..Sum up Second theory. It is also called Situation-Response theory This is Seller-Oriented Theory: It stress the importance of sales person controlling the situation.
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Buying Formula Theory
.This Theory was given by late E.K.
Strong Junior. Identify the problems of the buyer Identify his needs Map your product to his needs Provide a appropriate solution to him and justify the sale
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Behavior Equation Theory
B=P*D*K*V where B= Response or the internal response tendency, i.e. The act of Purchasing a Brand P = Predisposition D = Present Drive (Motivation Level) K = “Incentive Potential”, i.e. The Value of Product or its Potential Satisfaction to buyer. V = Intensity Of all cues
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Knowledge about the Product / Customers / Technology
Contextual knowledge to close the sale
Steps In Selling
Prospecting: In sales, the process of identifying likely customers by searching lists of previous customers, lists of trade associations, government publications, and a variety of other sources. Systematically collecting names of the prospects (called leads).
Steps in Prospecting: Formulating Prospect Definition Searching out Potential Account Qualifying Prospects
Presentation & Demonstration:- The crucial task of Selling is communicating about Product to buyer. A typical sales presentation follow AIDA approach. Usually in sales Presentation there is demonstration.
Sales Resistance / Handling Objection :- During sales presentation or at the time of closing sale, a salesman can encounter objection from the prospects
Closing the sale: It result for order into Product & Services. It is climax of whole game of selling
1. 2. 3. 4. 5.
Effective Efficient Enjoyable Enthusiastic Ethical…
Write an article on : An Effective Sales Manager
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Traditional Vs Relationship .
Do the deal & disappear Short term thinking and acting Building the business on deals Getting new customers Selling focused Incentive for doing the deal
Negotiate a win-win & stay around Long term thinking and acting Building the business on relationships Keeping all customers and clients Relationship focused for results Incentive for long term relationships and revenue Swift,strong,safe and enduring results through relationship building After sale support and service seen as investment in the relationship Rewards incentives for maintaining and growing relationship and revenue
Race for sales result After sales support and service –poor.
deals The deal is the end pursuit of deals
incentives for doing
Sale just the beginning of the pursuit of the long term relationship. Sales and Distribution 18 Pankaj Arora Management
Sales Management Function
Ques to be ask in Class.
Sales planning Strategic role of sales management
Before We Start Sales Plan Let Us Understand Some Basic Term
Market Potential:- A market potential is an the maximum possible sales opportunity present particular market segment & open to all seller of good or services during a stated future period. Sales Potential:- A sales Potential is an estimate the maximum possible sales opportunity present particular market segment open to specified selling goods or services during a stated period.
estimate of in a
of in company
Sales Potential represent sales opportunity available to a particular manufacturer/ Seller such as while a market opportunity indicate sales opportunity available to an entire industry
1. 2. 3. 4. 5. 6. 7.
Objective setting Designing sales force-Structure & Size Deciding sales force compensation Recruiting and Selecting sales force Training to sales people Guiding and Motivating the sales force Performance rating of the sales force
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Planning sales call
Looking ahead on the basis of present and immediate past. 1. Objectives 2. Scope of business
Can be daily ,weekly, monthly, quarterly or annual plan The plan before hand makes the manager responsible for the execution and forces a comparision between anticipated progress and actual achievements and also searches the means of proper implementation
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Strategic Role of Sales Management
Key Decision areas Determine the size of sales force Decision regarding type and quality of sales force required Designing the sales organization Territory designing Recruitment and training procedures Task Allocation Compensation of Sales force Performance appraisal and control system Feedback Mechanism to be adopted Managing channel relationships Co-ordination with Marketing Deptt.
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Relationship Strategy Establishing and maintaining a partnership type relationship internally as well as with the customer is a vital aspect of selling. The sales force that builds a effective relationship with the customer and provides valuable service are usually high performers and top achievers
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Double Win Strategy Both customer and the sales person come out of the sales with a sense of satisfaction. “The sales person is a problem solver” Results 1. Repeat business 2. Future referrals
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Q-Highest Quality C-Lowest cost D-Least delivery times
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Hard Sell Concern for self Talking Pushing product Presenting features Advocating without acknowledging
Soft Sell Concern for customer Listening Providing buying opportunities Presenting benefits Acknowledging needs
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Sales Quota Sales Territory
Refers to an expected routine assignment to sales units,such as territory,districts and branches etc. Also assigned to sales people (individual /groups) over a particular time period and are used to plan control and evaluate selling activities of a company.
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Quantitative goal that is assigned to an unit of . organization sales
Provides performance targets Provides standards Quotas provide control Quotas are motivational
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Types of Quotas
Sales Volum e Quota s
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Sales Volume Quotas
Sales Volume Quotas
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Related to selling costs within reasonable limits. Sales person may receive a expense budget which may be a percentage of the territory’s sales volume. The sales person must spend only this amount.
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Number made Number Number Number Number
of sales presentation of of of of service calls made dealers visited calls made for recovery new accounts opened.
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WHAT IS A SALES TERRITORY? A sales territory is composed of a group of customers or a geographic area assigned to a salesperson.
WHO IS RESPONSIBLE FOR TERRITORIAL DEVELOPMENT ?
Development of sales territories is usually the responsibility of the sales manager overseeing the larger sales units within the organization.
WHY ESTABLISH SALES TERRITORIES?
To obtain Proper market coverage. To establish a salesperson’s responsibility. To evaluate performance. To reduce sales expense.
Why sales territories may not be developed: Salespeople may be more motivated if they are not restricted. The company may be too small.
Is a function of every management to ensure the operations are being carried out as per the plan to achieve the objectives.
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Types of Sales Control
Prime responsibility Top Level Managers Purpose of control Approaches To Examine whether the -Sales anaysis planned results are being -Mkt Shares analysis achieved -Mktg expenses to sales ratio
. Plan Annual
Type of control
To Examine where the company is making and loosing money
Customer attitude Tracking profitability -Product territory -Market Share -Trade Channel -Order Size -Sales audit
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Steps in designing a sales control system
. Objective setting Designing different control levels Designing a report system and feedback system Deciding tools and techniques of control Variance analysis and reasons thereof Sales and Distribution
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Sales audit is a Comprehensive periodic Systematic Independent examination of a company’s environment objectives strategies and activities To determine problem areas an opportunities to recommend a plan of action to improve the company’s sales performance
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Aim of Audit
Find the true and accurate position of . sales To exercise control over future planning and over the results of a company To analyze the past performance and learn from the mistakes made To bring alertness to the organization To award increments promotions and give extra rewards
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Session 6 & 7
• • •
Organizing the sales force Recruitment, Selection and Training the sales force.
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Process of locating and attracting job . applicants.
Finding potential job applicants Identifying future good employees
Getting them to apply for the job
Provide information about company
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Advertisements. From Inside (friends/collegues). Recruitment agencies. Educational Institutes. Competitors and other industries.
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Who does Recruiting?
Personnel manager Higher level sales executives At times outsourced
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How is it done?
Job description - identify the duties, requirement responsibilities and conditions involved in the job. Job analysis – result of formal job analysisshould be in writing-Entails what duties and responsibilities of a sales position are-and on what basis the new employee will be evaluated-is used in recruiting selecting training, compensationg and evaluating
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Hiring Profile Application Scrutiny Interview Psychological testing Reference Check Physical Examination Job offer
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Give a man fish he will eat it , Train a man how to catch a fish he will feed his Family. This statement shows the importance of Training
Training the Sales force
1. 2. 3.
Aim of training Building sales training programme Identifying initial training needs Job specifications Trainee’s background and experience Sales related marketing policies
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On On On On On
Market place competitors handling competition communication negotiating
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Lectures Personnel conferences Demonstrations Role Playing Gaming/Simulation On job Training
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Compensation Evaluation of Sales Force
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Compensation plans for the sales force are designed to achieve several objectives Assist the company to meet sales projections To reward individual sales persons To bring earnings to desired level
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Formal Compensation Process
Determine compensation Objectives and strategies
Determine Compensation factors
Establish the sales force objectives
Appraisal and recycling
Implement long and short range progammes
Measure individual, group and Organizational performance Relate rewards to performance Pankaj Arora
Communicate compensation policy
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Methods of compensation
Salary Straight commission Target Commission Bonus, Profit sharing, fringe benefits Reimbursement of expenses
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Evaluation of Sales Force
Major steps Establishing sales goals and objectives Developing the sales plan Setting performance standards Allocating resources and sales efforts in implementing the sales plan Evaluating sales force performance Implementing corrective actions
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Management by objective: Mutual goal setting between sales manager and sales person
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Stages in effective performance evaluation
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Cost of sale Profit contribution Per unit sale Repeat sale Territory sale density Retailer relationship
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Quotas Selling expense ratio Gross margin ratio Territorial market share- industry sales to company sales Sales coverage effectiveness ratio- convert prospects to customers Call frequency ratio Non selling activities average order size Calls per day Order call ratio Average cost per call
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