ms62

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PCTI Limited - A Unique Name For Quality Education

MSMS--62 SALES MANAGEMENT62 SALES MANAGEMENT

SESSIONSESSION--11

BLOCKBLOCK--I SALES MANAGEMENT FUNCTIONSI SALES MANAGEMENT FUNCTIONSUNITUNIT--1 INTRODUCTION TO SALES MANAGEMENT1 INTRODUCTION TO SALES MANAGEMENT

UNITUNIT--2 PERSONAL SELLING2 PERSONAL SELLING

UNITUNIT--3 SALES PROCESS3 SALES PROCESS

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UNITUNIT--1 INTRODUCTION TO1 INTRODUCTION TO

SALES MANAGEMENTSALES MANAGEMENT

SALES MANAGEMENT:SALES MANAGEMENT:

It has been defined as the managementIt has been defined as the management

of a firm·s personal selling functionof a firm·s personal selling function

while distribution is the managementwhile distribution is the management

of the indirect selling effort i.e.sellingof the indirect selling effort i.e.sellingthrough extra corporate organizationsthrough extra corporate organizations

which form the distribution network of which form the distribution network of

the firm. The sales management taskthe firm. The sales management task

thus includes analysis, planning,thus includes analysis, planning,organizing, directing and controlling of organizing, directing and controlling of

the company·s sales effort.the company·s sales effort.

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DISTRIBUTION MANAGEMENTDISTRIBUTION MANAGEMENT

DistributionDistribution (or(or placeplace) is one of the four) is one of the four

elements of marketing mix. Anelements of marketing mix. An

organization or set of organizations (goorganization or set of organizations (go--betweens) involved in the process of betweens) involved in the process of

making a product or service available formaking a product or service available for

use or consumption by a consumer oruse or consumption by a consumer or

business user.business user.

Distribution ManagementDistribution Management comprisescomprises

management of channel institutions asmanagement of channel institutions as

well as physical distribution functions.well as physical distribution functions.

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EXCHANGE PROCESSEXCHANGE PROCESS

It is the sale and delivery of It is the sale and delivery of goods/services from thegoods/services from the

manufacturer to the consumermanufacturer to the consumer

can be consummated directly i.e.can be consummated directly i.e.

by the firm itself through its ownby the firm itself through its ownsales force or indirectly through asales force or indirectly through a

network of middleman such asnetwork of middleman such as

wholesalers and retailers.wholesalers and retailers.

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Essential tasks need to be performedEssential tasks need to be performed

in order to consummate successful exchangein order to consummate successful exchange

Contact Contact- - finding and communicating withfinding and communicating with

prospective buyerprospective buyer

Pr ospecting Pr ospecting- - Bringing together the marketersBringing together the marketers

offering and the prospective buyeroffering and the prospective buyer

N egotiation N egotiation- - Reaching an agreement on price andReaching an agreement on price andother terms of the offer so that ownership andother terms of the offer so that ownership and

possession can be transferred.possession can be transferred.

Pr omotion Pr omotion- - Of the marketers offerings, and hisOf the marketers offerings, and his

satisfaction generating potentialsatisfaction generating potential

Phy sical dist r ibution Phy sical dist r ibution- - Actual transfer of possessionActual transfer of possession

Collection Collection- - Of relevant consumers information andOf relevant consumers information and

revenue in exchange of goods or servicesrevenue in exchange of goods or services

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Interdependence of SalesInterdependence of Sales

and Distributionand Distribution

All organizations use their own sales force orAll organizations use their own sales force or

distribution network to reach out to theirdistribution network to reach out to their

customers.Activities of the sales organizationcustomers.Activities of the sales organization

would have to be coordinated with channelwould have to be coordinated with channeloperations if sales goals have to be effectively operations if sales goals have to be effectively

realized.realized.

The decision of the organization to allocate certain The decision of the organization to allocate certain

responsibility in the exchange process to itsresponsibility in the exchange process to itschannel members would define the scope of channel members would define the scope of

responsibility of its own sales force and thereby responsibility of its own sales force and thereby

would determine the type of personnel andwould determine the type of personnel and

training required.training required.

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Even though, an organization may decide to dealEven though, an organization may decide to dealdirectly with its wholesaler, semi wholesaler,directly with its wholesaler, semi wholesaler,retailer or consumer,it is required to decideretailer or consumer,it is required to decideupon the type of help it will provide to the firstupon the type of help it will provide to the first

and subsequent level of intermediaries.and subsequent level of intermediaries. The choice before an organization to have direct The choice before an organization to have direct

distribution, indirect distribution or adistribution, indirect distribution or acombination of the two is of strategic importancecombination of the two is of strategic importanceand depends upon factors such as the degree of and depends upon factors such as the degree of

control, flexibility, costs and financialcontrol, flexibility, costs and financialrequirements etc.The scope of distributionrequirements etc.The scope of distributionwould define that of the other.would define that of the other.

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To implement overall marketing strategy, the To implement overall marketing strategy, the

manufacturers need the cooperation of manufacturers need the cooperation of

distribution outlets in terms of adequate stockdistribution outlets in terms of adequate stock

maintenance, inmaintenance, in--store displays, local advertising,store displays, local advertising,point of purchase promotion.Within thepoint of purchase promotion.Within the

corporation, the sales organization is thecorporation, the sales organization is the

initiator as well as the implementer of theseinitiator as well as the implementer of these

dealer support operations.This would mean thatdealer support operations.This would mean that

the sales management has the responsibility of the sales management has the responsibility of structuring organizational relationship withinstructuring organizational relationship within

their own department and with interactingtheir own department and with interacting

organizational entities.organizational entities.

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Key decision areas inKey decision areas in

Sales Management relevant toSales Management relevant to

strategy formulationstrategy formulation

Deciding upon type Deciding upon type and quality of salesand quality of salespersonnel requiredpersonnel required

Determination of the Determination of the size of the sales forcesize of the sales force

Organization andOrganization anddesign of the salesdesign of the sales

departmentdepartment Territory designTerritory design

Recruitment &Recruitment &training procedurestraining procedures

Task allocationTask allocation

Compensation of Compensation of sales forcesales force

Performance Performance appraisalappraisal

FeedbackFeedbackmechanismmechanism

Managing channel Managing channel

relationshiprelationship Coordination withCoordination with

other Marketing other Marketing departmentdepartment

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Strategic Formulation ProcessStrategic Formulation Process

S tep1

S tep1- - Assessment of the competitiveAssessment of the competitivesituation and the corporate goals tosituation and the corporate goals todetermine the output that salesdetermine the output that salesmanagement is expected to give.management is expected to give.

S

tep2 S

tep2- - Define sales managementDefine sales managementobjectives in terms of delivering theseobjectives in terms of delivering theseoutputs both quantitative andoutputs both quantitative andqualitative.qualitative.

S tep3 S tep3- - Design sales strategy by decidingDesign sales strategy by decidingupon: type of sales effort required, typeupon: type of sales effort required, typeof sales personnel required, size of theof sales personnel required, size of thesales force, territory design, channelsales force, territory design, channelsupport & coordinationsupport & coordination

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Framework for joint decision makingFramework for joint decision making

in sales and distribution managementin sales and distribution management

Distribution channels Achievement of sales

Goals throughCompanys sales force

Distribution channels


Personal &Prospecting

through

Personal & Non-personalPromotion through

Companys sales force

Companys sales force

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Framework for joint decision makingFramework for joint decision making

in sales and distribution managementin sales and distribution management

Distribution channelsMaintaining

Inventory throughCorporate organization


Corporate sales organization


Companys own sales force

AccountsReceivables

through

Information feedbackthrough

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BLOCKBLOCK--1 SALES1 SALES

MANAGEMENT:BASIC FUNCTIONSMANAGEMENT:BASIC FUNCTIONS

UNITUNIT--2 PERSONAL 2 PERSONAL

SELLING &SELLING &

UNITUNIT--3 SALES PROCESS3 SALES PROCESS

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Examples of Personal SellingExamples of Personal Selling

Telemarketing

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Inside selling

Retail selling

Field selling

12 million people are engaged in personal12 million people are engaged in personal

selling in the United Statesselling in the United States

Represents about 10% of the work forceRepresents about 10% of the work force

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AdvertisingAdvertising

PersonalPersonal

sellingselling

Post Post- -transaction: transaction:

Reminder andReminder andreassurancereassurance

Post Post- -transaction: transaction:

Reminder andReminder andreassurancereassurance

AdvertisingAdvertisingPersonalPersonal

sellingselling

Transaction:Transaction:

PersuasionPersuasion

Transaction:Transaction:

PersuasionPersuasion

Pre-transaction:

Create recognition andCreate recognition and

info understandinginfo understanding

Pre-transaction:

Create recognition andCreate recognition and

info understandinginfo understanding

AdvertisingAdvertising

PersonalPersonal

sellingselling

Relative Importance of

Advertising and Personal Selling

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Characteristics of Personal SellingCharacteristics of Personal Selling

Flex ibi l ity Flex ibi l ity Adapt toAdapt to

situationssituations Engage in dialogEngage in dialog

Bu i ld s R el ationships Bu i ld s R el ationships

L ong termL ong term Assure buyers receiveAssure buyers receive

appropriate servicesappropriate services

Solves customer·sSolves customer·sproblemsproblems

Can not reach mass

audience Expensive per contact

Numerous calls

needed to generate

sale

Labor intensive

Con Pro

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ORDERORDER

GETTERSGETTERS

CurrentCurrentcustomerscustomers

NewNew

customerscustomers

ORDER

TAKERS

Inside Order Takers

(via mail, telephone,

internet)

Outside Field Sales

SUPPORT

PERSONNEL

Missionary

Salespersons

Trade

Salespersons

Technical

Salespersons

Types of SalespersonsTypes of Salespersons

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PCTI Limited - A Unique Name For Quality Education 16-18

Personal SellingPersonal Selling

Salespeople have many names

AgentsAgents

Sales consultantsSales consultants

Sales RepresentativesSales Representatives

AccountAccount

E xecutivesE xecutives

Sales EngineersSales Engineers

District ManagersDistrict Managers MarketingMarketing

representativesrepresentatives

Account DevelopmentAccount Development

RepresentativesRepresentatives

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Personal Selling TasksPersonal Selling Tasks

O r de r g e tting O r de r g e tting Seeking outSeeking out

customerscustomers

Creative sellingCreative selling

PioneeringPioneering

AccountAccount

managementmanagement

Order taking

R outine

writing up orders

checking invoices

assuring prompt order

processing

Suggestive selling

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Personal Selling TasksPersonal Selling Tasks

Missionary Missionary

DetailerDetailer

GoodwillGoodwill ´Closersµ´Closersµ

Cross-functional

Account service rep

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PCTI Limited - A Unique Name For Quality Education You are part of the total product

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PCTI Limited - A Unique Name For Quality Education The Personal Selling ProcessThe 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

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Prospecting:Prospecting:Identifying likely newIdentifying likely newcustomerscustomers L eadsL eads

Developing lists of Developing lists of Potential CustomersPotential Customers

Prospecting:Prospecting:Identifying likely newIdentifying likely newcustomerscustomers L eadsL eads

Developing lists of Developing lists of Potential CustomersPotential Customers

Pre-approach (Qualifying)

Finding and analyzinginformation about prospects

Evaluating a prospect¶s

potential

Creative Selling Process

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Approaching The Prospect Approaching The Prospect

HOW DO WE MAKE THE

INITIAL CONT ACT & BUILD

R APPORT

There is only one

time to make a first

impression

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Making The SalesMaking The SalesPresentationPresentation

Using PersuasiveUsing Persuasive

communicationcommunication

Hold AttentionHold Attention

Stimulate InterestStimulate Interest

DesireDesire

´Tell the product·s´Tell the product·s

storyµstoryµ


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Handling ObjectionsHandling Objections QuestionsQuestions

ReservationsReservations

Understand ConcernUnderstand Concern

CounterargumentsCounterarguments

Acknowledge concernAcknowledge concern

Clues to process

Clues to process


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Overcoming ObjectionsOvercoming Objections

IF HE H ADN¶T TOLD

ME WH AT HIS OBJECTION

W AS, I NEVER WOULD

H AVE BEEN ABLE TO HELP!

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Closing the SaleClosing the Sale

Closing signalsClosing signals

Trial close Trial close Asking theAsking the

prospect toprospect tobuy buy


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Following UpFollowing Up Commitments metCommitments met

ShipmentShipment

PerformancePerformance

Reinforce L Reinforce L --R R

relationshiprelationship

Satisfied customersSatisfied customers

rebuy & recommendrebuy & recommend


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Designing Sales Force Strategy Designing Sales Force Strategy

and Structureand Structure

Sales Force StructureSales Force Structure

Territorial sales force structure Territorial sales force structure

Product sales force structureProduct sales force structure Customer sales force structureCustomer sales force structure

Complex sales force structureComplex sales force structure

Managing the Sales ForceManaging the Sales Force

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Sales Force Strategy andSales Force Strategy and

StructureStructure

Sales Force SizeSales Force Size

Many companies use the workloadMany companies use the workload

approach to set sales force sizeapproach to set sales force size Other IssuesOther Issues

Outside and inside sales forcesOutside and inside sales forces

Team selling Team selling

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Recruiting and Selecting SalespeopleRecruiting and Selecting Salespeople

Careful recruiting can:Careful recruiting can:

Increase overall sales force performanceIncrease overall sales force performance

Reduce turnoverReduce turnover

Reduce recruiting and training costsReduce recruiting and training costs

Traits of Successful Salespeople Traits of Successful Salespeople Intrinsic motivationIntrinsic motivation

Disciplined work styleDisciplined work style

The ability to close a sale The ability to close a sale

Ability to build relationships withAbility to build relationships with

customerscustomers

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Training Salespeople Training Salespeople

Training period can be anywhere Training period can be anywhere

from a few weeks to a year or morefrom a few weeks to a year or more

Training is expensive, but yields Training is expensive, but yields

strong returnsstrong returns Many companies are adding WebMany companies are adding Web--

based sales training programsbased sales training programs

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Training Salespeople Training Salespeople

Training programs have many goals Training programs have many goals

Identify with the company and itsIdentify with the company and its

productsproducts

Know about customers and competitorsKnow about customers and competitors The basics of the selling process The basics of the selling process

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Compensating SalespeopleCompensating Salespeople

Compensation elements: salary, bonuses,Compensation elements: salary, bonuses,

commissions, expenses, and fringe benefitscommissions, expenses, and fringe benefits

Basic compensation plans:Basic compensation plans:

Straight salary Straight salary

Straight commissionStraight commission

Salary plus bonusSalary plus bonus

Salary plus commissionSalary plus commission

Compensation plans should direct theCompensation plans should direct the

sales force toward activities that aresales force toward activities that areconsistent with overall marketingconsistent with overall marketing

objectives.objectives.

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Supervising SalespeopleSupervising Salespeople

Supervision is used to direct and motivateSupervision is used to direct and motivatesalespeoplesalespeople

Companies will vary in how closely they superviseCompanies will vary in how closely they supervisetheir salespeople; will vary depending on the skilltheir salespeople; will vary depending on the skilllevel and maturity of the sales force, and type of level and maturity of the sales force, and type of sellingselling

Tools used: Tools used: Annual call plans and timeAnnual call plans and time--andand--duty analysis canduty analysis can

help provide directionhelp provide direction

Sales force automation systems assist in creatingSales force automation systems assist in creatingmore efficient sales force operationsmore efficient sales force operations

The Internet is the fastest The Internet is the fastest--growing sales technology growing sales technology tooltool

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Evaluating SalespeopleEvaluating Salespeople

Several tools can be usedSeveral tools can be used

Sales reportsSales reports

Call reportsCall reports

E xpense reportsE xpense reports

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After After--sales Servicesales Service RatingsRatings

0 1 2 3 4 5 6 7 8

Speed

.37

Reputation

3.38

Cost

4.39

Service

Quality

7.87

10

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

Low High

Job quality: do it right the first timeJob quality: do it right the first time

Prompt warranty workPrompt warranty work

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A Key to SuccessA Key to Success

Stay Close toStay Close to

Your Your

Customer Customer

andand

LISTEN!LISTEN!

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THEORIES OF SELLINGTHEORIES OF SELLING

AIDAS Theory:AIDAS Theory:

ATTENTIONATTENTION

INTERESTINTEREST

DESIREDESIRE

ACTIONACTION

SATISFACTIONSATISFACTION

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RIGHT SET OF CIRCUMSTANCESRIGHT SET OF CIRCUMSTANCES

THEORYTHEORY

The advocates of this theory define that The advocates of this theory define thatall the circumstances, which led to theall the circumstances, which led to thesales were appropriate for the sales tosales were appropriate for the sales tohave taken place. In other words, if thehave taken place. In other words, if thesales person is successful in securing thesales person is successful in securing theprospect·s attention, maintaining hisprospect·s attention, maintaining hisinterest and inducing his desire to buy interest and inducing his desire to buy

the product, the sales will result.the product, the sales will result.Moreover, if the sales person is highly Moreover, if the sales person is highly skilled, he will take control of theskilled, he will take control of thepresentation, which would lead to sales.presentation, which would lead to sales.

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Buying Formula TheoryBuying Formula Theory

This theory emphasize on the buyer. This This theory emphasize on the buyer. Thistheory emphasizes on the needs ortheory emphasizes on the needs orproblems of the buyer.The sales personproblems of the buyer.The sales personassist the buyer in finding an appropriateassist the buyer in finding an appropriatesolution to the problem.This solutionsolution to the problem.This solutionmay be in terms of a product ormay be in terms of a product orservice.This theory is based on theservice.This theory is based on theanalysis of the sequence of events thatanalysis of the sequence of events that

goes in the buyer·s mind during the salesgoes in the buyer·s mind during the salespresentation.The theory is based on thepresentation.The theory is based on thepresumption that the sales person willpresumption that the sales person willtake care of the external factors.take care of the external factors.

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ms62

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