SALES MANAGEMENT

- Decisions, Strategies& Cases Studies.- Authors –Richard R Still. Edward W. Cundiff Norman A.P.Govoni

Introduction

Sales Management is very important to become a Professional Sales Personnel.

To understand sales function in an organisation.

To become an enterpreneur.To understand Business nuances,strategies,Teamwork,markets,products,people.To make profits.

Do sales Executives Are Professionals?

Sales Exceutives- a)Plan b)Bulid c)OrganiseAdopts Effective control procedures.Approach as a professional.a)Personal selling objectivesb)Appropriate sales prioritiesc)Personal selling strategies.

Sales Executives Responsibility

CustomerSociety *Sales Volume *Profit Contribution *Continous Business GrowthResources---

Wholesalers/Retailers/Industrial/govt etc;*Selling social Responsibility&Social

Responsible products.

Sales Department

An evolution for economyEnterprise dominationSelling an easy jobMan power is lessAll jobs are self centered

Era of Revolution

In 1760 In England industrial revolution.American revolution in the US.Problems of Hiring labour.Acquiring LandBuliding and machinery.CapitalRevolution became an evolution paved way

further for various arms like a)Mfg /Finance/sales/mktg/distrbn etc;

Objectives of SM

Key function of any enterprise.ManufacturingRetailingWholesalingDistributingPricingProfiteering &Growth.

Objectives of Sales Management

- Responsibility of Top Management.- Financial Results- Sales Executive & Co-ordination- Co-ordination &Implementation of ovearll Sales strategy.

Responsibility of Top Management

Accountable for success &Failure of the org.Increase volume of sales with social

responsible products.Price to the consumer at satisfactory levels.Delegation to sales&marketing managers to achieve specific goals.Eg; 1) Goal Setting or Total Budget. 2)Market estimation{-Different

mkts/Targets.

Contd……..

3)Capability to achieve4)Competition &Price5)Influence of middlemen6)Channel management.7)Offers of freebies.8)Marketing startegies.9)Collections.

Contd……..

Result= Volume*price= total value Gross margins&Net profit in value.Other Functions of S.E:a)Prospectingb)Communicationc)Sellingd)Servicinge)Monitoringf)Allocating/Distribution

Functions Of S.E

Prospecting:- Finding Right customers.- Creating awareness Communication;-Passing on info for Products &Services.Selling: -Involves Personal salesmanship to sell.Servicing: Pre&Post sales service.

Contd…….

Monitoring:- Taking stocks of product/sales- Competitors product information Allocating&Distribution: -Supplying products to the network- Inventory mangement.- Logistics

Organisation& Co-ordination

a) Deptmnt co-ordination- External/Internalb) Top mangement decision makingc) Decision on circumstances.d) Co-ordination of Other Elements.*Planning &Co-ordination:-Knowledge of the market.-Mktg Programms-Achievment of Predetermined

sales/Profits&Growth.-

Co-ordination with elements

a)Personal selling&order getting methodsb)Build co-ordination into Mktg Plan.C)Execute promotional plan.d)Displays/ POP’sE) Incentives coupons etcF) Festival offers/ stock clearance sales.

Co-ordination Of Distribution of Network

a)Gaining Product DistributionB) Retailers,Middlemen.C)Forced Distribution/Pull Distributiond)Missionary &Instutional selling.e)Demand buliding for New Product.

Qualities Of Effective S.E

Relationship with Top MangementRelationship with other departments like;a)Production dept b)Mfg dept c)Distribution

dept c)Marketing dept d)Humanresourcese)Logistics etc; On the whole it is very essential that he shallact as a brand ambassador of any organisation.

Sales Organisation

*A good sales organisation is essential if management has to proceed in an orderly &effective pattern towards attaining its “Marketing Goals”.

*The sales organisation is the “Vehicle” through which strategic plans are translated into selling operations in the market place.

*It’s a group of individuals striving to achieve qualitative&quantitaive objectives.

Contd……

*A team work where every member performs to their potential for the profit of the organisation.

Purposes of Sales organisation:a) To develop specialists- As tasks groups in

nos,they are broken down into maneagable

units,are alligned into to specialised personnel.These assignments are called “Delegation Of authority”

Contd………..

b) Should focus as an “Informal organisation thro intelligent leadership and human relationship”

c)Specialists are required to reshape the organisation and professional to implement the task.

d)The tasks are broken into maneagable limits and given to specialised personnel.

Achieve Co-ordination or Balance

a) Good arganisation achieves co-ordination or balance.

b) Organisations achieves its accomplishment thro collective efforts as a team rather independently.

c) Motivation leads to better perfomance and co-ordination in the organisation.

d)Modern management suggests sales deptmnt-

Contd…………

-small and free communication to reduce unco-ordinated proliferation.

Define Authority: →Line →Staff →FunctionalLine Authority: Carries the power to require

execution of orders by those down the line personnel in the organisation.

Contd…

b)Staff Authority: Is the power to suggest to those holding line authority and the method of implementaion of orders.

c)Functional Authority:Enables Specialists in a particular areas to take decisions.

eg:Technical services

Sales Organisation- Steps

1) DEFINING OBJECTIVES2) DELIENATING NECESSARY ACTIVITIES3) GROUPING ACTIVITIES INTO JOBS AND

POSITIONS4) ASSIGNING PERSONNEL TO POSITIONS5) PROVIDES CO-ORDINATION AND

CONTROL.

Defining objectives

a)General objectives of Top Management.b)Vision of the company.c)Higher market share.d)Reputation Building.e)Diversity of product lines – ex; Tatas, Birlas,

ambanis etc:f)Industry leadership– AirTel,

Holcim,Sony,Maruti udhyog etc;

Deleinating Objectives

a) To define qualitative and quantitative objectives.

b) Required Executive positionsc) Relationship positionsd) Duties and responsibilities.e) Analysis the volume of performance in each department.

Grouping Activities

a)Activities identified as necessary are allocated to Direct Positions.

b)Closely related tasks assigned to same positions.

c) Sufficient no of taskls are required when large no position is set up.

Selection Process

• Selection• Recruitment

• Training• Supervision

• Performance Evaluation

• Compensation• Motivational

progm.

Job descriptio

n

Job Specificat

ion

Job Analysis

Job Evaluatio

n

Buyer- Seller Relationships

Attention

Interest

Desire Action

Satisfaction

Contd……….

Mc Murray &Arnold says “Different Sales Positions require different amounts and kinds of service and developmental skills in selling”

Aidas Theory is a basic tool which can be achieved only by acts of courtesy,enthusiasm,confidence & communication only.

Contd……….

Attention: -- Attention of a prospect --Feel the pulse of a customer --Find out customers’s need If there is a need a solution arises . If no needNo problem, no sale.Ex; Water

Contd…………..

Interest Stage: The prospect must be

interested in your propostion. Customer is involved, participate, become curious,wants to know more.

Ex; Driving A car at the show Room.

Contd…………….

Desire Stage: Can be aroused which makes the

prospect to think about purchasing product or services. Create the awareness of potential gain called “Romancing the product”

Ex; a) Success Strories---- MRF b)Illustrations gain ----- Ariel c) Prevention of losses– LIC d) Unique services------- Mobile Phones

Contd…………..

Action: Product or services shall remain in the

Shelf space or expire unless sales personnel creates justification for action.

Sales Persons should understand:a) Buying signalsb) Power of observationc) Ability to listend) Physical signals or vocal symptoms

Satisfaction: Sales personnel assurance to

customer that his decision is correct. Ultimately the customer feel satisfied with

the sales persons “Consultative selling Approach”

If a customer is a King the what the sales person should be?

Theory of Selling

a)Right set of circumstancesb)Buying Formulac)Behaviour equationd)Buyer seller Dyad &Reinforcemente)Influence of sales personf)Reducing Buyer Disonance.

Why People Buy?

1) Gain- To gain financial advantage eg;Gold/House etc;

2) Pride-To Satisfy the EGO or To BE the Best3) Fear-To compete with others.4) Imitation-To increase social

standing/enhancement of self image.5) Pleasure-To gain more comfortable

experience.eg Car/ Two wheelers/Jet planes/Ships etc;

Contd…………….

a)Market Potential- An estimate of the maximum possible sales opportunities present in the market segment which is open to all sellers of a particular goods or services during a stated future period.

b)Sales Potential-An estimate of maximum sales opportunities present in a particular market segment

open to an enterpreneur or company who sells product or services.

c)Sales Forecast-An estimate of sales in value,dollars,units for a future period under a particular mkts where forecast is made.It can be short term or long term, for a single or multiple products.

PROSPECTING

Effective planning is doneTo strectch Productive selling timeElimination of nonbuyers is called

prospecting.Benefits:a)Salespersons can apply their selling efforts

productivelyb)Prospecting can create Data base for future

businessOpportunties.“Professional SP’s are sucessful in prospecting.

Steps In Prospecting

1)Formulating Prospect Definitions2)Searching Out Potential Clients3)Qualifiying prospects &determining probable requirements.4)Relating company products to each

prospect’s requirements.

… Formulating/Searching/qualifying/Realting.

Prospective customers must have the willingness,financial capacity &authority to buy.

To identify an individual buyer/company buyer etc; Identifying characteristics of Profiatble and unprofitable accounts.Searching Potential clients:--------------------------------

Sales person differentiates sources for the names of probable prospects or “suspects”

• Can be obtained from various sources of business directories,credit reports,chamber of commerce directories,manufacturesrs association,yellow pages etc;

• Another sources thro “endless chain” with reference of satisfied customers.

Qualifying Prospects

Information of each tentative prospect &probable requirements of each product.

Converting probable requirements into business

Personal visits by sales persons for any special requirements of the prospects.

Prospects are separated from non prospects.

Relating products to Prospects

Final step of prospectingInformation is correctly assembled to determine each

prospective needs.Sales person’s presentation is now easy to construct, and it is tailored to fit the prospect. Sales person should have clear ideas about specific- objections the prospect may raise and other obstacles

to sales that may be encountered. Finally the sales person shall be ready to persuade the prospect to become a customer.

The Delphi Technique

Several years ago researchers at The Rand corporation developed a technique predicting the

future is called ‘Delphi Technique’. a)Roll of Sales force opinion: The method is tagged to “Grass Roots

Approach” which gives individual sales forecast of territories.

b) Projection of Post Sales: Simple projection method is next year sales=

present year sales x present sales divided by last year sales.

Time Series Analysis

A common device of mathematical projections of future sales. It involves projection of past sales trends into future.

To predict future sales: 1) Seasonal variation 2)Change in

business cycle 3)Longterm

trend sales 4)Irregular or

unexpected- variations.

Exponential Smoothing

-Another method of sales forecasting. It represents the “weighted Sum” of all particular nos in Time series with the Heaviest weight placed on the most recent data. Method is useful in forecasting large number of items are made.

Evaluation of Past sales projection methods:-The limitation of all past sales projection lies in the

assumption that past sales history is the sole factor in influencing future sales.

-No allowance is given for significant changes made by the company in its marketing programm or by its

competitors in theirs.

Product Market Analysis

Can a person is capable of selling all kinds of products

To all kinds of customers? Sales personnel -------------Some Products ----------- Some Customers

Sales Personnel- Specialists

ProductHighly

TECHNICAL

Product+Market

Skills (Tech)+

Market

MarketDifferent

customersUnique

Contd…………

Determination of type requires a)Interdependence dimension b)Expertise dimension.

1)Choice Of Basic Selling Styles: - Trade Selling - Missionary Selling - Technical Selling - New Business selling

Contd………..

Trade Selling: -Sales person develops long term relationship

with stable customers.- Job is dull & routine- Selling style predominates in well established

markets- SP’s provide promotional support to customers.- Missionary Selling:- Sp’s objective is to increase Co’s sales volume

by assisting customers with their selling efforts.

Contd…………..

Technical Selling:-Sp’s deal primarily with established accounts.- Provides technical assistance to increase

volume of business.- Sp’s spend time for tech details of products

with customers &detail them with all parameters.

- Specialise on products/ markets.- Some Sp’s specialise in Govt accounts.

New business selling

- Sp’s find and obtain new customers.- Convert prospects to customers.- Sp’s are creative,genius,highdegree of

resource fulness.- Co’s may consider the existing person for the

Job.

Closing Sales

Closing sales is an “Art”. For every hour i spend in front of a customer ,i probably spend five hours getting ready- Leo Kelly – Top sales person in Zerox Business.

-Low pressure sales closed early than high pressured ones.

-High pressure sales leads to prospect emotions Sp’s propel prospects into buying decisions.

-Closing time each gives the other the signal ‘yes’ or ‘no’.-Closing time provides tangible time of selling skills.- Prospect gives buying signal to close.- Sp’s gives feelers to close with clues

Contd………….

Sp’s gives indirect close without asking order from prospects

Close the sale sensibly,written document agreement- payment etc;

Closing of sales is an art.

Personal Selling Approaches

A Company’s competitive posture is shaped by a)Competitive setting b)overall mktg strategy c)Effectiveness of implementation.

Mktg department is dependant on sales force to achieve personal selling objectives.

a)Competitive&Personal selling objectives: Pure competitionMonopolistic competitionOligopolistic competitionNo direct competition

Contd……….

a)Pure competition:1. No single buyer or seller affects to total demand or

supply.2. Products are identical- Gas/ petroleum products3. No artificial restrints on price4. All buyers are informed seller’s price.b)Monopolistic competition:5. Mc exists when there is a large no of sellers of generic

kind of product,but each sellers brand is some way different from other brand.

6. Eg; Pain killers, iodised salt,Talcum powder,Each company’s uniquely appeal to customers in a different way.

Contd………

Oligopolistic Competition:1. A competitive setting where the no of competitors are

small enough that they are individually identified and known to each other and it is difficult for new competitors to enter the market.

2. Eg;Computers,automobiles,soaps and detergents,steel,aluminium etc;

3. Oc produces most aggressive competition.4. Changes are easily noticed in all selling/mktg activities.5. Personal selling plays an important role in buliding

relationship with dealers distribution,information&promotion.

Contd…

No direct competition:1. Neither monopoly nor the company mktg is radically

new ,differentproduct &has no direct competition.Analysis of Sp’s Role in Securing Orders:a) Company Aggressive Order getter Casual Order Getterb) Industrial produts->Sp’s plays minor rolec) FMCG Sp’s-------- Plays major role to satisfy middle

men.d)Sales Engineer----- Advisor to middle

Men/Consultant

Types Of Specialisation In Selling Organisation

Dominant InterdependenceDominant Expertise

Product Technologies

Customer ApplicationsCustomer Specialists

Personnel Management In Sales Field

Sales Force Management -- Economies - Role Involverment Law SFM:- Individuals as SF plan their own activities- Sales Personnel are affected with phsycological

pressure,fly,customers,boss etc; - Sf are selected as per qualification

required,trained,compensated with appropriate levels.- SP’s productive time, working methods etc;

Contd…..

Economies:1. Contribution per person is calculated on

volumes given,calls made,turnover etc;2. Compensation are salary, commission&

calculated as average cost per call/Per personnel

3. Maintaining sales force with two types of expenses a) Fixed b) Variable

4. Fixed: Salary/travel/sales folios/manuals/ 5. Variables: Commission/training/supervision

allowance etc;

Role Of Sales Personnel Turn Over

The rate of Sp’s turnover is a measure of the quality of SFM.

Ex: Employment of 250 persons with 20 attritions a year the turnover is 8%

The TO influences the total expenses of SFM.The expenses of SP’s TO can account for a significant

drain on profits.Awareness of current turnover is essential for a study.The personnel attrition is periodically analysed

periodically to determine the causes.MGMNT should take corrective action to reduce the

attrition.

Involvement Of SE in SFM

Involving SE’s in SFM is important like responsibility,

Commitment,participation,planning &implementation

Semi Variable Costs:a) Mixture of variable&fixed costs.b) Change or vary in volume but fixed in direct

proportion to volume of sales.c) Vary less than proportionate ratiod) Less controllable than variable cost &more

maneagable than fixed costs.

The Law &Sales Force Management

EEOC- Equal Employement opportunity commission.

OFCC – Office Of federal contract compliance assists employers to implement ploicies and not to select on the basis of cast,race,colour,religion, gender or origin.

EEOC applies to 25 persons or more.OFCC – Applies to 100 persons or more.Discrimination on the basis of age is prohibited

by the age discrimination in employement act.

Job Analysis

“An analysis which requires information of specific jobs, written description with regard to qualification, characteristics of job &also provides hiring, transfers, promotion, training, dismissals”

1)Sales Job Analysis: a) The duties & responsibilities of sales person. b) Difficulties to be faced by him/ her while

performing duty. c) Personal traits to perform job satisfactorily. d) Thorough job description to be performed by

salesmen.

Job Description

1) Reporting Relationship.2) Job Objectives.3) Duties & Responsibilities4) Performance Criteria.5) Performance Measure. The check list consists of : a) Sales b) Service c) Territory Management

Contd….

d) Sales promotione)Executive Preparationf)Goodwill.

Econometric Model Building &Simulation

An attractive sales forecasting methods for cos marketing durable goods.

Basically attempt to express economic theory in mathematical terms.

Verified by statistical methods & predicts future event.Econometric models are quite complex &expensive to

develop.Predicts turning point accurately.Model used in industrial products, consumer durables where “Replacement Demand” is a significant factor. S= R+N S= Total Sales, R= Repalcement Demand,

N= New owner demand.

Recruitment Of Sales Personnel

‘Recruitment and selecting Sp’s are an important part of implementing personal selling strategy’

Recruiting is a process by which a fair secure pool of applications to be considered for hiring.

A suitable Form has to be made where methodology of selection is given with all relevant details of the candidate with assesment form for evaluation.

Sources of sales force recruitment

Sources within the organisation:Company sales personnel- Other cos sales people

recommendation.Company executives --- Recommendation from Sr

Mgr’s, Vp’s , President etc;Internal transfersSources outside company:Direct unsolicited application- Walk in interviewsConsultantsCampus interviewsJob websites News paper advertisements

Interviews

Initial

Intensive

Patterned

Non Directive

Stress

Rating scale

TESTS

Tests

Intelligence Achievments Interest PersonalityTypes of Tests:1) Abstract Intelligence- Flexibility or versatility in the case of

symbolic process.2) Mechanical Tests - Ability to deal with concrete material.3) Social Intelligence – Test or ability to deal with human

realtionships4) Interest Tests - Measure of interest in comparison with

successful people.5) Sales Aptitude Tests- Present knowledge in selling and

behaviour in a given situation.

Determining The Size Of Sales Force

Management decides the size of SF in the personal selling strategy.

1. Work load method2. Sales potential method3. Incremental methodi. Work Load Method: Assumption is all Sp’s should take equal work Management estimates the total workload method Involved in covering the entire market, then

divides the work load to individual Sp’s and determines total no of persons required.

Contd………

2) Sales Potential Method: Is based on assumption that performance of the set of activities contained in

the job represents 1 sales /personnel per unit. The total turnover can be estimated for each Sp’s to contribute towards company’s growth.

It can summarize as n= s/p+t (s/p) n= s/p (1+t) n= no of sp’s /units s = forecasted volume p= estimated sales productivity/per sp’s /unit t= allowance for rate of sales force turnover In a growing company, potential sales volume often depends on the ability of sales staff bringing the volume of business and turnover.

Incremental Method

Is the best approach to determine sales force size.

Based on one proposition Additional sales force = Increase in net

profit If

incremental sales revenue exceeds the incremental cost incurred.

Incremental revenue -----Incremental costs.

Motivating Sales Personnel

Motivation:Is that force within us that directs our own

behaviour.Sources leads to needs,wants &actions.Internal drive with selection of behaviour.It is the complex of needs &desires,stemming

within individuals leads them to act,to satisfy the needs&desires.

Factors Of Motivation

Factors relating to job: Job satisfaction/skill/Task etc;

Factors relating to organisation: Sp’s work -environment& relationship skills.

Factors relating to environment: Territory, work load conditions.

Factors relating to personal characteristics: Promotion &Financial rewards.

Motivation From Management

Management offers help Sp’s to reach& achieve acceptable performance levels.

Motivation is needed to individual or group.Management converts sales group as an effective

sales team thro motivation.Performance leads to quality which affects the Sp’s in 4 ways.a) Inherent nature of sales job.b) Boundary position 0r Role conflictsc) Apathy Tendencyd) Group identity feeling.

Contd…………..

a) Inherent Nature:1. Every sales job faces ups &Downs, feeling of

exhilaration &depression.2. Dealing with pleasant & arrogant people.3. Feeling of frustration with competing sales

personnel.4. Extra time on job &less time with family.5. Reaches non-selling positions due to lack of

motivation for sp’s.

Boundary Position or Role conflicts

Boundary Position refers dealing with people in 1) sales management 2)order fulfillment

3)customers 4)Other co’s Sp’s. Sales persons faces different people with different wave length at time leads to conflicts.Conflict of identification arises out of multi group membership.Advocacy conflicts arises when Sp’s identifies

customers position to other group’s in the company.Conflict is inherent in Sp’s dual role between

company &customers.

Contd….

Apathy Tendency (Lack Of interest) -> Meeting same customer, territory -> Over confidence about customers, less investment on salesmenship. -> Customers lack of interest towards salesmen.Group Identity feeling: -> Sp’s maintain relationship with group to identify

himself. -> Sales managers provides motivation individually to

attain group standards.-> Co-operative Endeavour ,group feeling is essential to

achieve objectives of management continuously.

Hierarchy of Needs

PRIMARY NEEDS- Food, water,rest,sleep,air,breath,sex&so on.. (these are inborn)

SECONDARY NEEDS- Safety,security,belongingness,social relations,self –esteem, Self respect etc; ( Not inborn but develop with maturity)

“An understanding of Maslow’s hierarchy of needs helps us to classify customer’s needs and satisfy them more effectively”

Hierarchy Of Human Needs- A.H.Maslow

Self actualisationNeeds

Esteem Needs

Belongingness &Social Relations Needs

Safety & security NeedsBasic Physiological Needs

Contd…..

1. Basic Needs --- > Food/ water/clothing

2. Safety & Security Needs Security of job/ Protection

3. Belongingness& Social needs-> Friendship/ love/affection

4. Esteem Needs ---- > Self respect/status/recognition/achievment

5. Self Actualisation --- > Growth, Fullfilment of ambition.

Contd……

“As a particular need is satisfied ,it looses its potency as a motivator,but other needs unfulfilled,new ones gain in potency. Individuals continously try to fullfill larger portion of their need structures & the unsatisfied portion exerts strongest pull”

Theories Of Motivation: Dougals Mc gregory proposed two different theories in the

year 1960.. Theory X Theory Y Basically it expressses the human nature.

Contd….

X Theory involves --- Negative Aspect Human Behaviour

Y Theory involves -- Positive Aspect

X Theory : Assumptions by Managers on workers1. Dislike Lazy work2. Workers should be controlled&punished3. Seeks directions from bosses always &avoid

responsibilities.4. Security of job gains importance & ambition

gains minor imporatnce.

Contd……

Y Theory: 1. Workers can work as natural,rest&play.2. Workers can exercise self-direction,self

control in a given environment.3. Accepts responsibilty &lean to grow 4. Creative,imaginative & Resourceful. The theories are nothing to do with

motivation but explains nature human behaviour under two different assumptions.

Motivation – Hygiene Theory

Self ActualisationEsteemSocial

SecurityPhysiological

(Maslow Model)

Fredrick Herzberg and his co-researchers developed Motivation

Hygiene Theory

Motivational factors- work,growth,responsib

iltyHygiene

Interpersonal,peers,boss,subordinate,policy,jo

b

security ,salary,personal life.

Contd………

Deficiencies in fullfilling the Hygiene Needs cause job disatisfaction.

Mangement to ensure the condition to prevent job disatisfaction.

Achievment Motivation Theory: David Mccleland developed the theory.

The Theory says three Basic Motivation needs;a) Power b) Need for Affiliation c) Need for achievment . David

says the Need For Achievment, gains maximum importance. Need for power has a great concern for excercising

control&influence. People with affliation keeps pleasnt relationship.

Contd……

People with high need for achievment have strong desire for “success”, love challenges.

Mclelland used “Thematic APPerception Test” called TAT in the research.

Vroom’s expectancy Theory: Victor Vroom proposed this theory as an

alternative to the consent methods /models.Widely known as a Theory of motivation to

understand the purpose of motivation.

Contd……..

The theory says a persons desire to work at any time controlled by two factors.

a) Existence of one or more personal goals on the part of the employee.

b) Expectation as to the relative worth of his performance for attainment of such goals.

Vroom’s Model: Force(motivation)= valence multiplied by

expectancy. The term “Valence” stands for an outcome of action

will lead to desired outcome. a) Efforts b) Performance c) Rewards d) Goals

MOTIVATION & LEADERSHIP

Trait Theory: This theory derives this belief from the philosophy of ancient greek “Leaders Are Born &Not made”Eg: Napolean, Hitler,Ceasar,Alexander, Mahatma Gandhi.Stodgill identified; a) Physical Traits (appearance, high energy b) Intelligence Tests-(Understanding comphrehending,decision making) c) Personality Traits-( Adjustability aggresiveness,Enthusiasm,willpower.) d) Task Related- (Achievment,Initiative, perseverance) e) Social Traits-( Co-operation,Interpersonal group cohesion)

STYLES

1. Authority2. Behaviour3. Others Motivation &Communication: It is important that any Sp’s should be a good

communicator The word communication has been derived

from the latin word “Communis” which implies common

or transfer of information from “sender to reciever”

Contd……….

Peter Little defined “ Process thro which info is passed between individuals.

New Man viewed it as an exchange of facts,ideas,opinions,symbols or emotions of two persons.

Process Of Communication

Message Understandi

ng

Interpersonal Contact

Management uses contacts to make comprehensive

evaluations of individual sales people morale.

Sales supervisors, managers apart from regular routine job makes personal contact of Sp’s.

Interpersonal contact is the best way to keep in touch with the sales staff .

Certain occassions Sp’s are contacted over phone.

Motivational interviews are conducted to gather into bit by bit.

Written Communication

A method of communication given in writing form;

Others are a) Formal b) Downward or Upward c)Horizontal e) Informal f) Body language.

Better Communication

Robert Feller says “Every body communicates in one way or another, but few deliver their messages as well as they can.

Good communication is life blood of the organisation

It takes forms such as speaking, writing &listening.

The purpose is always to convey a message to recipients.

It can handle information & improve relationships.

Achieving clarity

The three rules that govern good communication are all associated with clarity.

1. Be clear in your mind about what you want to communicate;

2. Deliver the message succinctly.3. Ensure that the message has been clearly

&correctly understood Good communication means saying what you

mean-& Fully comprehending any feedback.

Choosing Methods Of Communication

Written WordIn any language various media,the written

word is basic to literate socities

Spoken Word

Communication that is effective only when it is heard by the right people

Symbolic GesturesAny positive or negative behaviour that can

be seen or heard by the intended target

Visual ImagesImages that can be percieved by target or

group

Multi Media A combination of the different

Methods above ,often involving ITInformation technology

Examples Usefulness

a)Written WordLetters,memos,notes,contract

s,summaries,agendas,notices,regulations,minutes,plans,discussi-on,documents

b)Spoken Word Conversations,interviewsmee

tings,phone calls,debates,requests,debriefings,announcements,spee

ches.

The written word is the basis of organisational communication,used because it is relatively permanent&accesible.

Verbal exchanges in person and by phone are used because of their immediacy,they are bthe chief means by which organisations work on day –to-day basis.

Examples

Examples Usefulness

c)Symbolic Gestures: Gestures,facial expressions,actions,tone

of voice,stance,posture,movement,immob-ilty,presence,absence.

d)Visual images: Photographs,

paintings,drawings,illustrations,graphics,cartoons,videos,logos,film,doodles,

Collages,colour schemes.Multi media:Television,newspapers,magazines,flyers, posters,internet,intranet,world wide

web,video,radio,cassttes,CD-roms.

Actions and body language profoundly but unconsciously affect people-propoganda depends on the manipulation of positive &negative signs.

Visual images are used because they convey powerful conscious& unconscious messages.

Media are especilally useful when they can be participative. The more &professional the use of multimedia,the more effective &productive they are likely to be.

Contd…

Compensating Sales Personnel

Sales compensation plan is an essential part of the sales personnel motivation

Sales Company Personnel Role: 1) Providing Living wage 2) Adjust pay levels to performance 3)Provide a mechanism to compensate& achieve company goals.

Sales compensation plan are aids to rather substitutes for effective motivation.

In established organisation sales compensation are periodically revised.

Major changes are rare unless sweeping changes are required.

Contd….

Living habits may vary if companies changes to salary to commission.

Changes may occur to revive,restructure&cultivate

Sp’s in different markets.

Requirement Of Good Compensation Plan

1) Living wage2) Secure Income3) Motivation4) No penalisation of Sp’s5) Easy To understand Plan6) Payment as per Performance7) Attain of objectives of cos

Define The Sales job Compensation

Nature of sales jobJob descriptionJob objectivesWritten&Oral descriptionSales volume objectives (units,dollars etc;)Policies to be carried outGoals,duties& activities

Company’s General Compensation Structure

a)There are four job evaluation methods Two are quantitaive & Two are Non-Quantitative.1. Factor comaprison method2. Point System Quantitative

3. Simple Ranking Method Non Quantitatve

4. Grading Method

Contd……..

1. Simple Ranking Method: Inexpensive job evaluation method done

without considering individuals currently in their

jobs or their compenstion levels. Widely used in

small businesses.2. Grading: The approach is to compare individual jobs

&utilise a system of grade descriptions

Contd…

1. Point System: The point system is the most widely used

job evaluation method in many organisations .It involves establishing &defining the factors common to most jobs that represent the chief elements of value inherent system in all jobs.

It includes a) Job knowledge b) Responsibility c) Communication skills d) Physical skills

e)Personality f) Educational qualification g) Other skills etc;

Contd….

2. Factor Comprising Method: The method resembles point system but is

more complex.It utilizes a scheme of ranking & cross comparisons to minimize error from faulty judgement.The scale values are with total earnings

and no upper limit exists.Allocation of compensation relates eachjob.

3. Job Evaluation & Slaes Positions: Job evaluation occurs whenever decisions

are made about the relative worth of jobs.

Contd…….

It is in escapable in an organisational life.Informal evaluation exists where Formal

evaluation is not used.Sp’s disagree formal evaluation quoting a)

Supply demand factors b) greater job mobilty.Formal Job evaluation includes job or

salespersonnel.Sales positions are regarded as appropriate

for inclusion in formal job evaluation programms.

Compensation Patterns in Community & Industry

Sales personnel compensation levels are related to

external supply & demand factors. - Management needs answers for these questions

below:1. What compensation system are used?2. What is the average compensation for similar

positions?3. How the companies are doing with their plans?4. What are pros&cons of desparity from industry

or community pattern?

Determine Compensation Level

Average compensation to sales person is a must.Management should ascertain caliber of Sp’s &

compensation.Management should estimate sales worth in value and sales from Sp’s. Management to practice each cost estimates on a Real

chart.Formal Job evaluation programmes.Unusual to find two cos operates under similar selling

conditions but with different compensation levels.Sales managers are biased in favour of High

compensation for selling jobs.

Various Compensation Elements

• Four basic elements:1. Fixed compensation/salary -> Stability2. Variable/commisions/bonus etc ->Incentive

exra income.3. Element of Fringe factor plus -> Paid

vacation/insurance etc;4. Reimbursement of expenses -> Payment

of expenses as allowances. Fixed element ratio : 60:40 Variable : 80:20

Types Of Compensation

1. Straight salary plan2. Straight commission plan3. Determine commission base4. Drawing Accounts5. Combination of salary &incentive plan6. Use of Bonuses7. Fringe benefits

Straight Compensation plan

1. Simplest compensation plan2. Total payment in 7 days/15 days etc;( Industrial

goods)3. Used commonly in trade selling ( Van sales

personnel,liquor sales personnel)4. Economical to administer due to simple method.5. Accounting costs are lower6. Provides stable income & freedom from financial

uncertainities.7. Weakness is monetary incentive is lacking.8. Management can easily measure good/average/bad

performers.

Weakness Of SCP’s

Little financial control over Sp’s activities.Sp’s feel they are discharging their full

responsibilty.Careless in reports, leads,followups,shade

prices to make sales,use high pressure tactics,loss

of customer good will.Sp’s will sell low margin items neglect to sell

high margin items.Management need to spend a lot of time,

effort money to keep up the spirit of Sp’s.

Determine Commission base

Select the base pay to commission.Co’s selling policies & problems strongly

influence selection of the base commission.If Sp’s made collection on sales then

commission is based on collections.To control price cutting by Sp’s some

companies fix commission on gross margins.

Reimbursement of sales expenses- policies &practices

1. Reimbursing sales expenses are Sp’s pay their own expenses& claim .

2. Reimburse part of their expenses ( Allowances are Fixed)3. Co’s reputation is involved in paying the reimbursement

expenses on time.4. The common guidelines reimbursement to Sp’s are as per position,grade,total t.o of business etc;5. Expenses incurred are alawys away from H.Q on company

business.6. Expenses reimbursement should take living standards of

Sp’s outside H.Q7. Sp’s stay in different places and customers recogonise the

place of stay.

Methods Of controlling & Reimbursement

1. Flat expense account2. Flexible expense account3. Honor system4. Expense quota a) Flat expense account: - A stipulated sum to cover allexpenses during a given period. - Less paper work /more freedom within stipulated limits. - Control of expenses by their Sp’s. - Plan call average economic tour circuits. - Flat expense requires skilled administration. - Mangement reviews plan of each in case of

adequcacy/inadequacy.

Flexible Expense Account

Also known as Exact plan. - Its salient feature is that sp’s are reimbursed all allowable

expenses incurred &reported. Furnish expenses under each Heads.( travel by

bus,train,food,laundry) etc; Also entertainment expenses are reported and reimbursed at

certain levels. The flexibilty of expenses, sales opportunities are utilised. Mangement exercise limit of expenses,call average etc; Flexible account leads to unattractive administarive expenses time,clerical work etc; Dispute arises without monitoring and finally loose control.

Planning Sales Training Programmes

*Experts point out that training is considered one of the key elements in the development & implementation of mktg &sales strategies.

*There are several types of training programms.Building sales training programms require five major decisions called A C M E E.

1. A- Aim2. C- Content3. M-Method4. E- Execution5. E- Evaluation

Objectives Of Sales Training Programmes

1. Lower Turnover2. Better control3. Control of employees4. Improve customer Relation5. Lower selling costs6. Higher premium for products7. New product launch8. Grooming to higher positions

A C M E E - Approach

Acmee approach or called as “Kipling six honest serving men”

They are six honest serving questions; why? What ? How ? Who? When ? Where ?A-imsC-ontentsM-ethods

Recycle/Redesign/Modify/SoforthE- xecutionE- valuation

Programme Administration

Training Philosophy

Organisation For Sales Training

Timing Of Programms

Location of Training

Instruction Manual &Training Aids

Philosophy Of Training Programmes

a) Conditioned Responseb) Insight Response a) Conditioned Response; Philosophy to train sales personnel to respond in a standardised or programmed ways. ex; DetailMen in Pharma cos, News readers in T.V&Radio.b) Insight Response; Philosophy to train analytical skills to respond appropriately

& individualised ways. ex; Singers classical or carnatic. The other factors regards sales force as a future talent with higher calibre for the management future needs.

Organisation & Sales Training

Acmee requires four key organisational decisions.1. Who will be the trainer?2. Who will do the training?3. When will it take Place ?4. Where the training will be? Identifying the trainees are more complex in training

programmes and yet another four followed in some organisations.

5. Reward for Good Performance.6. Punishment for poor performance7. Convenience of the trainee/trainer8. Seniority

Contd…….

Who will do the training?a) Initial training- A line function or Staff Functionb) Continuing Sales Training: Responsibilty rests on top sales executive

for the introduction of New Products,improving selling techniques, Revised sales policies. The top executives identifies need,design&excute the program. This is a continous responsibilty.

c) Sales Training Staff: 1) Delegation of sales tarinee to sub-ordinates. 2) Top excutives delegates to Dsm’s RSM’s ASM’s. 3) Co’s can have the fulltime or part time training. 4) Few large corporates have full time Training Manager in the organistions. 5) Corporates shall engage Proffessional Trainers to train the sales trainees.

Training The Sales Trainers or Training The Trainee

Corporates have training programm for sales trainers.

The trainers should know the subject thoroughly.The trainers should know the a) Company b)Products

c)Policies d)Customers e)Problems f)Sales Persons Job g) Sales Techniques.

Trainers use instructions guide,have specialised knowledge,effective teachers.

Trainers should plan,organise effective teaching methods & presentation skills.

The saying is “If the trainee has’nt learned the training the trainer has’nt taught.

Contd….

*Outside Experts: Hiring the outside experts to conduct

portions of sales training programme.Presentations of trainers in the companies.Fees are fixed on contract basis,programm

basis, annual basis, perhead basis,hourly basis. No of trainers required per training

programme.

When Will The Training Programm Takes Place?

1. Timing of group vs individual training - When new persons joining the training programm. - When the new persons need motivational training. 2. When a group of people joins the organisation. - Group training is the only source to develop employees.3. Theoretical & Practical fundamentals of selling is taught in the training programm. 4. Individualised training is conducted in the field. 5. Other methods are thro cds,phone,mail , virtual class rooms

etc;

Timing Initial Sales Training Programm

Change or turnover of sales personnel.Increasing in size of sales force.Sales personnel product turnover is

increasingManagement plans for additional sales force.Optimum no of trainers are effectively

trained.More no of people in tarining less

efeectiveness.

Training Continous Sales Training Programms

Effective sales management believes tarining is a continous process.

Sales personnel are continously kept informed of new development.

Management should assume sales personnel are eager to learn & improve selling techniques.\

Training programms are localised Decenteralised training Corporate training Group or personalised training

Instruction Material & Training Aids

1. Manuals.2. Training Aids.3. Printed materials/guides4. Advance Assignments a) Manuals: Work books,manuals used in group training. Best manual containing reading material Caselettes,problems,directions. Policies of co’s & Procedures Study guides & references later.

Contd…

Printed Materials; - Company bulletins,sales & product broucheres,books,technical

matters,journals etc; - Books serve vas reference guides. Training Aids: An auxiliary device transmission of details &sound stimuli. Most of people uses Black Board/White Board etc: a) Audio Visual b) OHP c)Digital projection. d)Lap top presentation. e) Motion picture or Film.

Motion picture or FilmShort Film DemoIn house video in camera sessionsRole play & Feed backClose circuit television*Advance Assignments:Used for groups& individualsTrainees consume time outside formal

sessions.To prepare for higher productivity.

Evaluation Of Sales Training Programmes

Performance against set standardsTests & examinationCustomer feed back on sp’sAnalytical techniques & influenceSimulation of Trainers effectivenessEvaluation of the Trainer’s sessions in a feed - back format.

Controlling Sales Personnel Evaluating & Supervising

a) Controlling: 1) To understand meaning, steps &process control 2)To examine prerequisites& characteristics of

control process.3)Importance of control system.4)Analyse methods of control.5)Role of integrated control system. “ Henry fayol’s definition of control consists in

verifying whether everything occurs by confirming with the plans adopted,the instructions received & principles established”

Contd…………

“Efl Brech says control is checking performance against predetermined standards contained in the plans with a view to ensure adequate progress &satisfactory performance”

“George R. Terry says controlling is determining what is being accomplished, that is evaluating the

performance that takes place according to plans” The four stepe are :1) Establishing perforamnce standards.2) Recording performances.3) Evaluate performance against standards.4) Taking action.

Standards Of Performance

a) Setting standards of performance requires consideration of the nature of the selling job. Sales job analysis is necessary to determine job objectives,duties &responsibilities &the like.

b) Standards of performance facilitate the measuerment of progress made toward deparmental objectives.

c) Specific objectives vary with change in the cos marketing situation,but reconcilable with general objectives of volume,profit &growth.

d) The standards are used to guage the extent of achievment of general &related specific objectives.

Contd…………

Ex: Standards of achievment---Target of sales - volume,units,value.. Specific Objectives --------- No of calls made,type -classification etc;

The quantitative standard that any firm should select is one that permits comparison of sales volume

performance with sales volume potential.Setting sales performance standards requires considerable

market knowledge.Should know the total sales potential &the portion that

each sales territory is capable of producing.

QUANATIATIVE QUALITATIVE

Sales Person&Operating Period:1. Sales – Std or exceeded Quota.2. New Accounts obtained3. Sales to new accounts4. Total no of calls&average calls

perday .5. No of times called on accounts.6. Total contacts period/average7. Proportion of calls 8. Total sales meeting

held/attended9. Customers entertained

period/average per week.

a)Job Factors:1. Product Knowledge.2. Awareness of customers3. Relationship with customers4. No of sales calls5. Quota performance6. Service follow-upsb)Personal factors Punctuality Dress&appearnce Diligence Co-operation Accuracy Adaptability Relaiability Strong points/weakpoints

Quantitaive vs Qualitative performance Standards

Contd……..

Quotas: Quotas are quantitaive objectives to sales organistional

units,individual sales personnel. Quotas are devices for directing & controlling sales operations.

1. To provide quantiative performance standards.2. To provide higher sales & expense control.3. To motivate desired performance.4. To use in sales contests.5. Quotas forecast sales/budget.6. Types of Quotas ---- > Sales volume --- Budget -- Activity - Combination

Contd….

7. Procedures: a) Territorial quotas b) Total market estimates. c) Past sales experienced) Executive judgemente)Compensation planf) Own sales volume quotas.g) Budget quotas ---- > Net profit -- Expenses

Contd……….

Sales Expense Ratio:To be used to control the relation of selling

expenses to sales volume.Are determined after analysis of expense

conditions &sales volume potential in each territory.

Shortcomings are doesn't take into account variations of different products profitability.

The ratio is used more in industrial products than consumer products.

Territorial Net profit on Gross Margin Ratio

Def: Target ratios of net profit or gross margin to sales for each territory focus Sp’s attention on the needs of selling a balanced line and considering relative profitabilty .

Mnagement emphazise more profitable products and devote more time &effort.

“ Net profit controls sales volume &expenses as well as net profit”

Gross margin ratio controls sales volume and the relative profitabilty of the sales mixture and does not the expenses of obtaining & filing orders.

The shortcomings are neglect solicitation of new accounts and overemphazise sales of high profit or high margin products and may indermine new products.Then the NPR may face computational problems.

Contd……..

Territorial Maket share: Def: This satndard controls market share on a territory by

territory basis. Mnagement sets target % age of market share for each

territory . It comapares company sales to industry sales in each territory and measures the effectiveness of Sp’s in obtaining market share.

Sales coverage effectiveness index:Def: This standard controls the thoroughness with which a

sales person works the assigned territory.The index consists of ratio of no of customers to the total

prospects in a territory. Individual standards for sales coverage effectiveness are

set up for each class and size of customers.

Contd………

Call frequency ratio: A call frequency ratio is calculated by providing the no of calls on a particular class of customers by the no of customers in that class.

Ex: A class----------- > 1o customers / 2 times in 15 days. B class ---------- 20 customers 1 time in 30 days. C class --------- 60 customers 1 time in 30 days. Calls Per Day:1. Set a standard for number of calls to be made per

day.2. Plan routes ,appointments befor making a call.3. Standard for calls per day are set individually for

different territories.

Contd……..

Order call Ratio:1. This ratio average the effectiveness of Sp’s in securing orders. Its also called as

“Batting Average”.It is calculated by dividing the no of orders secured by the no of calls made perday.

2. Order call ratio standards are set for each class of account like A,B,C. Average Cost Per Call:1. To emphasize the imporatnce of making profitable calls.2. A target for average cost per call is set.3. Target average cost per call standards are also used to reduce the call frequency on

accounts responsible for small orders. Average Order Size:1. Average order size standards control the frequency calls on different accounts.2. The practice is set different standards to different sizes and class of customers.3. This objective may require Sp’s to reduce the frequency of calls on some accounts.

Contd…

Non Selling Activities: Some organisations establish performance

stanadard for non selling activities.1. Dealer Displays.2. Co-operative Advertising contracts.3. Training distributor personnel.4. Good will calls on distributors. Multiple Quantitative Performance: Sales personnel can be assigned nine different

quantitative standards per operating period.

The Sales Budget

A blue print for making profitable sales . It is defined as a sales budget consists of estimates of operating period’s probable dollar and unit sales and the likely selling expenses.

Purpose of Sales Budget:1. Mechanism of control2. Instrument of planning3. Budget form and content4. Estimation of budgeted selling expenses5. Budgetary procedure.6. Planning styles /stages &budgetary procedure7. Actual budgetary procedure.8. Handling competition with the budget.9. Selling the sales budget to Top Management.10. Selling the sales budget to Top Management.11. Budget & Control.12. Flexibility.

Budgetary Procedure

Company budgetary procedure normally begins with the sales department.

The prediction flows of sales revenues directly impacts other departments.

Once top management gives tentative approval to the sales budget other departments prepare budget outlining their plans.

Production deptmnt takes its cue from the sales budget inpreparing manufacturing expense&inventory.

Financial department use the sales budget to prepare budget for capital expenditures,earnings cash position&administrative expenses.

Production deptmnt--------------Unit salesFinancial deptmnt---------------- > Sales revenue

Sales Territories

Sales territories facilitates making selling efforts with sales opportunities.

Reasons for establishing Sales Territories:Market coverageControlling sales expensesAssisting Sp’sContribution to SF’s moraleCo-ordination of personal selling &Advertising.Routing, scheduling&controlling.To increase market share& marginsTo attain a position in market place.

Sales Control &Cost Analysis

Sales Audit: A systematic,critical&unbiased review of the

policies of selling functions of the organisation. To examine Six Main Aspects:1. Objectives2. Policies3. Organisation4. Methods5. Procedures6. Personnel