ms-62

An ISO 9001:2008 Certified Organization

MS-62 SALES MANAGEMENT

SESSION-1

BLOCK-I SALES MANAGEMENT FUNCTIONS

UNIT-1 INTRODUCTION TO SALES MANAGEMENT

UNIT-2 PERSONAL SELLING

UNIT-3 SALES PROCESS

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UNIT-1 INTRODUCTION TO SALES MANAGEMENT

SALES MANAGEMENT:

It has been defined as the management of a firm’s personal selling function while distribution is the management of the indirect selling effort i.e.selling through extra corporate organizations which form the distribution network of the firm. The sales management task thus includes analysis, planning, organizing, directing and controlling of the company’s sales effort.


DISTRIBUTION MANAGEMENT

• Distribution (or place) is one of the four elements of marketing mix. An organization or set of organizations (go-betweens) involved in the process of making a product or service available for use or consumption by a consumer or business user.

• Distribution Management comprises management of channel institutions as well as physical distribution functions.


EXCHANGE PROCESS

• It is the sale and delivery of goods/services from the manufacturer to the consumer can be consummated directly i.e. by the firm itself through its own sales force or indirectly through a network of middleman such as wholesalers and retailers.


Essential tasks need to be performed in order to consummate successful exchange

• Contact- finding and communicating with prospective buyer

• Prospecting- Bringing together the marketers offering and the prospective buyer

• Negotiation- Reaching an agreement on price and other terms of the offer so that ownership and possession can be transferred.

• Promotion- Of the marketers offerings, and his satisfaction generating potential

• Physical distribution- Actual transfer of possession

• Collection- Of relevant consumers information and revenue in exchange of goods or services


Interdependence of Sales and Distribution

• All organizations use their own sales force or distribution network to reach out to their customers.Activities of the sales organization would have to be coordinated with channel operations if sales goals have to be effectively realized.

• The decision of the organization to allocate certain responsibility in the exchange process to its channel members would define the scope of responsibility of its own sales force and thereby would determine the type of personnel and training required.



• Even though, an organization may decide to deal directly with its wholesaler, semi wholesaler, retailer or consumer,it is required to decide upon the type of help it will provide to the first and subsequent level of intermediaries.

• The choice before an organization to have direct distribution, indirect distribution or a combination of the two is of strategic importance and depends upon factors such as the degree of control, flexibility, costs and financial requirements etc.The scope of distribution would define that of the other.



• To implement overall marketing strategy, the manufacturers need the cooperation of distribution outlets in terms of adequate stock maintenance, in-store displays, local advertising, point of purchase promotion.Within the corporation, the sales organization is the initiator as well as the implementer of these dealer support operations.This would mean that the sales management has the responsibility of structuring organizational relationship within their own department and with interacting organizational entities.


Key decision areas in Sales Management relevant to

strategy formulation• Deciding upon type

and quality of sales personnel required

• Determination of the size of the sales force

• Organization and design of the sales department

• Territory design• Recruitment & training

procedures• Task allocation

• Compensation of sales force

• Performance appraisal• Feedback mechanism• Managing channel

relationship• Coordination with other

Marketing department


Strategic Formulation Process

Step1-Assessment of the competitive situation and the corporate goals to determine the output that sales management is expected to give.

Step2-Define sales management objectives in terms of delivering these outputs both quantitative and qualitative.

Step3-Design sales strategy by deciding upon: type of sales effort required, type of sales personnel required, size of the sales force, territory design, channel support & coordination


Framework for joint decision making in sales and distribution management

Distribution channelsAchievement of salesGoals through

Company’s sales force

Distribution channels


Personal & Prospecting

through

Personal & Non-personalPromotion through




Framework for joint decision making in sales and distribution management

Distribution channelsMaintainingInventory through

Corporate organization


Corporate sales organization


Company’s own sales force

AccountsReceivables

through

Information feedbackthrough

An ISO 9001:2008 Certified Organization

BLOCK-1 SALES MANAGEMENT:BASIC FUNCTIONS

UNIT-2 PERSONAL SELLING &

UNIT-3 SALES PROCESS


Examples of Personal Selling

Telemarketing

Inside selling

Retail selling

Field selling

• 12 million people are engaged in personal selling in the United States

• Represents about 10% of the work force


AdvertisingAdvertising

PersonalPersonalsellingselling

Post-transaction:• Reminder and

reassurance

Post-transaction:• Reminder and

reassurance

AdvertisingAdvertisingPersonalPersonalsellingselling

Transaction:Transaction: PersuasionPersuasion

Transaction:Transaction: PersuasionPersuasion

Pre-transaction: Create recognition and info Create recognition and info

understandingunderstanding

Pre-transaction: Create recognition and info Create recognition and info

understandingunderstanding

AdvertisingAdvertising

PersonalPersonalsellingselling

Relative Importance of Advertising and Personal Selling


Characteristics of Personal Selling

Flexibility• Adapt to situations• Engage in dialog

Builds Relationships• Long term• Assure buyers receive

appropriate services• Solves customer’s

problems

Can not reach mass audience

Expensive per contactNumerous calls

needed to generate sale

Labor intensive

ConPro


ORDER

GETTERS

Current

customers

New

customers

ORDER

TAKERS

Inside Order Takers

(via mail, telephone, internet)

Outside Field Sales

SUPPORT

PERSONNEL

Missionary

Salespersons

Trade

Salespersons

Technical

Salespersons

Types of Salespersons

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Personal Selling

• Salespeople have many names

– Agents– Sales consultants– Sales Representatives– Account

Executives– Sales Engineers– District Managers– Marketing representatives– Account Development

Representatives


Personal Selling Tasks

Order getting• Seeking out

customers• Creative selling• Pioneering• Account

management

Order taking Routine

writing up orders checking invoices assuring prompt order

processing

Suggestive selling


Personal Selling Tasks

• Missionary– Detailer– Goodwill– “Closers”

Cross-functionalAccount service rep


You are part of the total product


The Personal Selling Process

PROSPECTING: IDENTIFYING POTENTIAL CUSTOMERS

APPROACHING THE PROSPECT

FOLLOWING UP

CLOSING THE SALE

HANDLING OBJECTIONS

MAKING THE SALES PRESENTATION

Pre approach: QUALIFYING PROSPECTS


Prospecting: Identifying likely new customers– Leads– Developing lists of Potential

Customers

Prospecting: Identifying likely new customers– Leads– Developing lists of Potential

Customers

Pre-approach (Qualifying)Finding and analyzing

information about prospectsEvaluating a prospect’s

potential

Creative Selling Process


Approaching The Prospect

HOW DO WE MAKE THEINITIAL CONTACT & BUILD

RAPPORT

There is only one time to make a first impression


Making The Sales Presentation

• Using Persuasive communication

• Hold Attention

• Stimulate Interest

• Desire

• “Tell the product’s story”



Handling Objections– Questions– Reservations

• Understand Concern

• Counterarguments

• Acknowledge concern

• Clues to process



Overcoming Objections

IF HE HADN’T TOLDME WHAT HIS OBJECTION

WAS, I NEVER WOULDHAVE BEEN

ABLE TO HELP!


Closing the Sale• Closing signals• Trial close• Asking the

prospect to buy



Following Up• Commitments met

– Shipment– Performance

• Reinforce L-R relationship

• Satisfied customers rebuy & recommend




• Designing Sales Force Strategy and Structure– Sales Force Structure

• Territorial sales force structure• Product sales force structure• Customer sales force structure• Complex sales force structure

Managing the Sales Force



• Sales Force Strategy and Structure– Sales Force Size

• Many companies use the workload approach to set sales force size

– Other Issues• Outside and inside sales forces• Team selling



• Recruiting and Selecting Salespeople– Careful recruiting can:

• Increase overall sales force performance• Reduce turnover• Reduce recruiting and training costs

• Traits of Successful Salespeople– Intrinsic motivation– Disciplined work style– The ability to close a sale– Ability to build relationships with customers



• Training Salespeople– Training period can be anywhere from a few

weeks to a year or more– Training is expensive, but yields strong

returns– Many companies are adding Web-based

sales training programs



• Training Salespeople– Training programs have many goals

• Identify with the company and its products• Know about customers and competitors• The basics of the selling process



• Compensating Salespeople– Compensation elements: salary, bonuses,

commissions, expenses, and fringe benefits– Basic compensation plans:

• Straight salary• Straight commission• Salary plus bonus• Salary plus commission

– Compensation plans should direct the sales force toward activities that are consistent with overall marketing objectives.



• Supervising Salespeople– Supervision is used to direct and motivate salespeople– Companies will vary in how closely they supervise their

salespeople; will vary depending on the skill level and maturity of the sales force, and type of selling

• Tools used:– Annual call plans and time-and-duty analysis can help

provide direction– Sales force automation systems assist in creating more

efficient sales force operations– The Internet is the fastest-growing sales technology

tool



• Evaluating Salespeople– Several tools can be used

• Sales reports• Call reports• Expense reports


After-sales Service Ratings

0 1 2 3 4 5 6 7 8

Speed.37

Reputation3.38

Cost4.39

ServiceQuality

7.87

10

(SCALE: Degree of Importance) (JMR/Vol. 78)

Low High

• Job quality: do it right the first time• Prompt warranty work Servic

eAward


A Key to Success

Stay Close to Your

Customer

and

LISTEN!


THEORIES OF SELLING

AIDAS Theory: ATTENTIONINTERESTDESIREACTIONSATISFACTION


RIGHT SET OF CIRCUMSTANCES THEORY

The advocates of this theory define that all the circumstances, which led to the sales were appropriate for the sales to have taken place. In other words, if the sales person is successful in securing the prospect’s attention, maintaining his interest and inducing his desire to buy the product, the sales will result. Moreover, if the sales person is highly skilled, he will take control of the presentation, which would lead to sales.


Buying Formula Theory

This theory emphasize on the buyer. This theory emphasizes on the needs or problems of the buyer.The sales person assist the buyer in finding an appropriate solution to the problem.This solution may be in terms of a product or service.This theory is based on the analysis of the sequence of events that goes in the buyer’s mind during the sales presentation.The theory is based on the presumption that the sales person will take care of the external factors.

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