1 sales management function

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The Sales ManagementFunction


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Marketing is identifying andsatisfying customers needs

profitably.

What is Marketing


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Place of Personal Selling in4Ps of Marketing


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What is Personal selling?

Personal selling is the process of a

sellers person-to-person promotionalpresentation to a buyer. The salesprocess essentially is interpersonal,and it is basic to any enterprise.

Accounting, engineering, humanresource management, production,and other organizational activities

produce no benefits unless a sellermatches the needs of a client orcustomer.


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Personal Selling

Personal selling is the interpersonal

part of the promotion mix and caninclude:

Face-to-face communication

Telephone communication

Video or Web conferencing

The Role of the Sales Force


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Personal Selling

Salespeople are an effective linkbetween the company and its

customers to produce customer valueand company profit by:

Representing the company to customers

Representing customers to the company Working closely with marketing

The Nature of Personal Selling


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When is Personal selling required?

For example, personal selling is an important

component of the promotional mix for a cardealer, although both dealers andmanufacturers also rely heavily on advertising.

Because cars and trucks are expensive,

customers usually like to go to a dealership tocompare models, discuss a purchase, or obtainservice, and trade-ins often are involved. So adealers salespeople provide valuableassistance to the customer.


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Factors Affecting the Importance of Personal Selling in thePromotional Mix

Variable

Conditions That FavorPersonal Selling Conditions That FavorAdvertising

Consumer

Product

Geographically

concentrated

Relatively low numbers

Expensive

Technically complex

Custom made

Special handling

requirementsTransactions frequently

involve trade-ins

Geographically dispersed

Relatively high numbers

Inexpensive

Simple to understand

Standardized

No special handling

requirementsTransactions seldom

involve trade-ins

Price Relatively high Relatively low

Channels Relatively short Relatively long


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Alternative Sales Channels for ServingCustomers


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Advantages of Personal selling overother forms of promotion

Personal selling provides a detailed explanation ordemonstration of the product. This capability isespecially needed for complex or new goods andservices.

The sales message can be varied according to themotivations and interests of each prospectivecustomer. It is a two-way process. Moreover, whenthe prospect has questions or raises objections, thesalesperson is there to provide explanations.

Personal selling can be directed only to qualifiedprospects. Other forms of promotion include someunavoidable waste because many people in theaudience are not prospective customers.


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Sales Tasks

Three basic sales tasks can beidentified:

Order Processing

Creative Selling

Missionary sales


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Order Processing: selling, mostly at thewholesale and retail levels, that involves

identifying customer needs, pointing themout to customers, and completing orders

Creative Selling: personal selling involvingsituations in which a considerable degree

of analytical decision making on thebuyers part results in the need for skillfulproposals of solutions for the customersneeds

Missionary sales: indirect type of selling inwhich specialized salespeople promote thefirms goodwill among indirect customers,often by assisting customers in product

use


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Managing the Sales Effort

Sales management: Activities ofplanning, organizing, staffing,motivating compensating, and

evaluating and controlling a salesforce to ensure its effectiveness


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Recruitment and Selection One of the sales managers greatest

challenges

Careful selection is important fortwo reasons: Substantial costs involved

Mistakes are costly and detrimental tocustomer relations and sales-forceperformance


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Training

Principal methods used are on-the-job training, individualinstruction, in-house classes,and external seminars

Popular training techniquesinclude instructionalvideotapes/DVDs, lectures,

roll-playing exercises, slides,films, and interactive computerprograms


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Organization

General organizational alignment

may be based on geography,products, types of customers, orsome combination of these factors

National accounts organization:

organizational arrangement thatassigns sales teams to a firmslargest accounts


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Basic approaches to organizing the sales force


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Supervision

Span of control: the number of salesrepresentatives who report to the firstlevel of sales management

Optimal span of control is affected bysuch factors as complexity workactivities being performed, ability ofthe individual sales manager, degree

of interdependence among individualsalespersons, and the extent oftraining each salesperson receives


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Motivation

Efforts to motivate salespeople usually

take the form of the briefings,information sharing, and bothpsychological and financialencouragement

Psychological encouragement includesappeals to emotional needs,recognition, and peer acceptance

Financial encouragement includesmonetary rewards and fringe benefitssuch as club memberships and salescontest awards

Expectancy theory


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Compensation Commission: incentive

compensation directly related tothe sales or profits achieved by asalesperson

Salary: fixed compensationpayments made periodically to an

employee


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Evaluation and Control Sales quotas: level of expected sales for

territory, product, customer, orsalesperson against which actual resultsare compared

Other measures such as customer

satisfaction, profit contribution, share ofproduct-category sales, and customerretention

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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Contributions of

Personal Selling toMarketing

Producing SalesRevenue

Meeting BuyerExpectations

ProvidingMarketplaceInformation

Multiple Roles of Salespeople


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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 makestrategic partnerships.

Understand the customers future plans and offer

ideas about how your company can help furtherthem.

Be willing to change your processes and products.

Offer something uniquea technological change, anew way of delivering, or a large price concession.

Get to know all the people interested in theproduct, from purchasing managers to engineers.

Keep on top of potential product problems.

Be able to explain how your company plans toimprove the quality and reliability of its products.


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The Donts of Salespeople Use industry buzzwords without knowing what

youre talking about.

Portray your company as quality-conscious if itsnot.

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 thatdoesnt meet their needs.

Simply talk pricing orGive a canned presentation. Come without ideas orKnow nothing about the

competition.

Offer products today that youre not likely to havetomorrow.


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Technical Support Technical support salespeoplehave expertise inareas such as design and installation of complexequipment and may provide specialized training tocustomer employees.

Sales SupportSales support salespeopleare not directly involvedin concluding customer purchases. They support thepersonal product selling function by promoting aproduct or providing technical support.

more

Types of Personal SellingJobs


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ExistingBusiness Existing-business salespeople, sometimes called

order takers, includewholesaler reps who follow an established route,writing up fairly routine orders from their customers.

NewBusiness Members of the sales force who concentrate on

selling new products or selling to new customers arecallednew-business salespeople.

more

Types of Personal SellingJobs (cont)


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Direct to Consumer

Direct-to-consumer salespeoplesell toindividuals who personally use the products andservices. Several additional million direct-to-consumer salespeoplerepresent firms such as Avon, Tupperware, Amway,and other direct-selling companies.

Types of Personal SellingJobs (cont)

T l i b d f


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Term sales representative covers a broad range ofpositions

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 (thesalesperson standing behind the counter) oroutside order taker (the soap salespersoncalling on the supermarket manager).

3. Missionary-A salesperson who is notexpected or permitted to take an order butwhose major task is to build goodwill or toeducate the actual or potential user (themedical "detailer" representing an ethical

pharmaceutical house).


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4. Technician - A salesperson with a high levelof technical knowledge (the engineeringsalesperson).

5. Demand creator-A salesperson who relies oncreative methods for selling tangibleproducts (vacuum cleaners, cleaning brushes,

household products) or intangibles(insurance, advertising services, oreducation).

6. Solution vendor - A salesperson whose

expertise is in the solving of a customer'sproblem, often with a system of thecompany's products and services (forexample, computer and communications

systems).


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The Sales Process


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Sales Management Activities

The starting point for sales managementis developing a sales strategy to executethe firms marketing strategy,

It emphasizes the development of amarketing mix to appeal to defined

target markets. A sales strategy focuses on how to sell to

specific customers within those targetmarkets. Two key elements of a salesstrategy are a relationship strategy and a

sales channel strategy.


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Should salesforce be generalists or specialists?

If specialists, should they be product, market,customer, or functional specialists?

Should centralized or decentralized control beused?

How large should the salesforce be?

How should customers and geographic areas beassigned to form sales territories?

How should salesforce turnover be factored intosales organization design decisions?


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The main activities are: Recruiting is the process of finding prospective jobcandidates

Selecting involves choosing the candidates to be hired

Initial training, which typically focuses on productknowledge and sales techniques

Continual training for all salespeople is becoming morestandard as firms attempt to stay current andcompetitive in an ever-changing environment.


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Directing salespeople to meet goals andobjectives consumes much of the typicalsales managers time. These activities

include:

Motivation Supervision

Leadership of the sales force.


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Sales managers must establish standards bywhich performance and effectiveness aremeasured, evaluate performance andeffectiveness 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 anassessment of the entire sales organization.


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Sales Management Process


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Sales Leaders Levels in theOrganizational Hierarchy


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Percentage of Time spent on functional

activities by organizational level


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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 strategydecisions. Once made, its the sales managers job toimplement the personal selling part of a marketingstrategy.


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Thank You


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1 sales management function

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