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The Sales Management Function

What is Marketing
Marketing is identifying and satisfying customers needs profitably.

Place of Personal Selling in 4Ps of Marketing

What is Personal selling?


Personal selling is the process of a sellers person-to-person promotional presentation to a buyer. The sales process essentially is interpersonal, and it is basic to any enterprise. Accounting, engineering, human resource management, production, and other organizational activities produce no benefits unless a seller matches the needs of a client or customer.

Personal Selling
The Role of the Sales Force

Personal selling is the interpersonal part of the promotion mix and can include: Face-to-face communication Telephone communication Video or Web conferencing

Personal Selling
The Nature of Personal Selling

Salespeople are an effective link between the company and its customers to produce customer value and company profit by:
Representing the company to customers Representing customers to the company Working closely with marketing

When is Personal selling required?


For example, personal selling is an important component of the promotional mix for a car dealer, although both dealers and manufacturers also rely heavily on advertising. Because cars and trucks are expensive, customers usually like to go to a dealership to compare models, discuss a purchase, or obtain service, and trade-ins often are involved. So a dealers salespeople provide valuable assistance to the customer.

Factors Affecting the Importance of Personal Selling in the Promotional Mix

Variable Consumer

Conditions That Favor Personal Selling Geographically concentrated Relatively low numbers Expensive Technically complex Custom made Special handling requirements Transactions frequently involve trade-ins Relatively high Relatively short

Conditions That Favor Advertising Geographically dispersed Relatively high numbers Inexpensive Simple to understand Standardized No special handling requirements Transactions seldom involve trade-ins Relatively low Relatively long

Product

Price Channels

Alternative Sales Channels for Serving Customers

Advantages of Personal selling over other forms of promotion


Personal selling provides a detailed explanation or
demonstration of the product. This capability is especially needed for complex or new goods and services. The sales message can be varied according to the motivations and interests of each prospective customer. It is a two-way process. Moreover, when the prospect has questions or raises objections, the salesperson is there to provide explanations. Personal selling can be directed only to qualified prospects. Other forms of promotion include some unavoidable waste because many people in the audience are not prospective customers.

Sales Tasks
Three basic sales tasks can be identified:
Order Processing Creative Selling Missionary sales

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Order Processing: selling, mostly at the wholesale and retail levels, that involves identifying customer needs, pointing them out to customers, and completing orders Creative Selling: personal selling involving situations in which a considerable degree of analytical decision making on the buyers part results in the need for skillful proposals of solutions for the customers needs Missionary sales: indirect type of selling in which specialized salespeople promote the firms goodwill among indirect customers, often by assisting customers in product use

Managing the Sales Effort


Sales management: Activities of planning, organizing, staffing, motivating compensating, and evaluating and controlling a sales force to ensure its effectiveness

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Recruitment and Selection


One of the sales managers greatest challenges Careful selection is important for two reasons:
Substantial costs involved Mistakes are costly and detrimental to customer relations and sales-force performance

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Training
Principal methods used are onthe-job training, individual instruction, in-house classes, and external seminars Popular training techniques include instructional videotapes/DVDs, lectures, roll-playing exercises, slides, films, and interactive computer programs
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Organization
General organizational alignment may be based on geography, products, types of customers, or some combination of these factors National accounts organization: organizational arrangement that assigns sales teams to a firms largest accounts
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Basic approaches to organizing the sales force

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Supervision
Span of control: the number of sales representatives who report to the first level of sales management Optimal span of control is affected by such factors as complexity work activities being performed, ability of the individual sales manager, degree of interdependence among individual salespersons, and the extent of training each salesperson receives
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Motivation
Efforts to motivate salespeople usually take the form of the briefings, information sharing, and both psychological and financial encouragement Psychological encouragement includes appeals to emotional needs, recognition, and peer acceptance Financial encouragement includes monetary rewards and fringe benefits such as club memberships and sales contest awards Expectancy theory

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Compensation
Commission: incentive compensation directly related to the sales or profits achieved by a salesperson Salary: fixed compensation payments made periodically to an employee

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Evaluation and Control


Sales quotas: level of expected sales for territory, product, customer, or salesperson against which actual results are compared Other measures such as customer satisfaction, profit contribution, share of product-category sales, and customer retention Another way to categorize a salespersons strong points:
Task, or technical ability Process, or sequence of work flow Goal, or end results (output) of sales performance
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Multiple Roles of Salespeople


Producing Sales Revenue

Contributions of Personal Selling to Marketing Providing Marketplace Information

Meeting Buyer Expectations

The Dos of Salespeople


Know your product and its competition better than the buyer does. Be a tough, but open, negotiator. Have the backing of your company to make strategic partnerships. Understand the customers future plans and offer ideas about how your company can help further them. Be willing to change your processes and products. Offer something uniquea technological change, a new way of delivering, or a large price concession. Get to know all the people interested in the product, from purchasing managers to engineers. Keep on top of potential product problems. Be able to explain how your company plans to improve the quality and reliability of its products.

The Donts of Salespeople


Use industry buzzwords without knowing what youre talking about. Portray your company as quality-conscious if its not. Focus exclusively on short-term sales goals. Talk about strategic alliances without having the support of your company. Say, We want your business, and well make it up later. Try to persuade purchasers to buy something that doesnt meet their needs. Simply talk pricing or Give a canned presentation. Come without ideas or Know nothing about the competition. Offer products today that youre not likely to have tomorrow.

Types of Personal Selling Jobs


Sales Support

Sales support salespeople are not directly involved in concluding customer purchases. They support the personal product selling function by promoting a product or providing technical support.

Technical Support

Technical support salespeople have expertise in areas such as design and installation of complex equipment and may provide specialized training to customer employees.

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Types of Personal Selling Jobs (cont)


New Business

Members of the sales force who concentrate on selling new products or selling to new customers are called new-business salespeople.

Existing Business

Existing-business salespeople, sometimes called order takers, include wholesaler reps who follow an established route, writing up fairly routine orders from their customers.

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Types of Personal Selling Jobs (cont)


Direct to Consumer

Direct-to-consumer salespeople sell to individuals who personally use the products and services. Several additional million direct-toconsumer salespeople represent firms such as Avon, Tupperware, Amway, and other direct-selling companies.

Term sales representative covers a broad range of positions Six can be distinguished, ranging from the least to the most creative types of selling: 1. Deliverer-A salesperson whose major task is the delivery of a product (water, fuel, oil). 2. Order taker-A salesperson who acts predominantly as an inside order taker (the salesperson standing behind the counter) or outside order taker (the soap salesperson calling on the supermarket manager). 3. Missionary-A salesperson who is not expected or permitted to take an order but whose major task is to build goodwill or to educate the actual or potential user (the medical "detailer" representing an ethical pharmaceutical house).

4. Technician - A salesperson with a high level of technical knowledge (the engineering salesperson). 5. Demand creator-A salesperson who relies on creative methods for selling tangible products (vacuum cleaners, cleaning brushes, household products) or intangibles (insurance, advertising services, or education). 6. Solution vendor - A salesperson whose expertise is in the solving of a customer's problem, often with a system of the company's products and services (for example, computer and communications systems).

The Sales Process

Sales Management Activities

The starting point for sales management is developing a sales strategy to execute the firms marketing strategy, It emphasizes the development of a marketing mix to appeal to defined target markets. A sales strategy focuses on how to sell to specific customers within those target markets. Two key elements of a sales strategy are a relationship strategy and a sales channel strategy.

Sales Management Activities

Should salesforce be generalists or specialists? If specialists, should they be product, market, customer, or functional specialists? Should centralized or decentralized control be used? How large should the salesforce be? How should customers and geographic areas be assigned to form sales territories? How should salesforce turnover be factored into sales organization design decisions?

Sales Management Activities

The main activities are:

Recruiting is the process of finding prospective job candidates Selecting involves choosing the candidates to be hired Initial training, which typically focuses on product knowledge and sales techniques Continual training for all salespeople is becoming more standard as firms attempt to stay current and competitive in an ever-changing environment.

Sales Management Activities

Directing salespeople to meet goals and objectives consumes much of the typical sales managers time. These activities include:

Motivation Supervision Leadership of the sales force.

Sales Management Activities

Sales managers must establish standards by which performance and effectiveness are measured, evaluate performance and effectiveness against these standards, and then take appropriate follow-up action.

Salesperson performance refers to how well individual sales people meet job expectations. An evaluation of sales force effectiveness is in fact an assessment of the entire sales organization.

Sales Management Process

Sales Leaders Levels in the Organizational Hierarchy

Percentage of Time spent on functional activities by organizational level

Strategy Planning for Personal Selling


Marketing managers must decide how much, and what kind of, personal selling effort each marketing mix needs. As part of their strategy planning, they must decide how many salespeople they need what kind of salespeople they need what kind of sales technology support they need what kind of sales presentation to use how to select and train salespeople, and how to supervise and motivate them. The sales manager provides input into these strategy decisions. Once made, its the sales managers job to implement the personal selling part of a marketing strategy.

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