sales management for iipm b1 b2
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SALES MANAGEMENT
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WHAT IS SALES?
Two party : Buyer & Seller.
Transfer of Goods & Services.
Transfer of Ownership. Profit to the Seller.
Benefits to the Buyer.
Monitory Value.
Satisfying the need of the Buyer.
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CONTINUED----
It may be a product
Service
IdeaConcept
Destination
person
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WHAT IS SALES MANAGEMENT
American Marketing Association
Sales management means the planning, direction
and control of personal selling, includingrecruiting , selecting, equipping, assigning,
routing, supervising, paying and motivating as
these tasks apply to the personal sales force
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NATURE AND SCOPE OF SALES
MANAGEMENT
The nature or characteristics of sales
management can be explained by
a)
Its integration with marketing managementb) Relationship selling
c) Varying sales responsibilities
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INTEGRATION WITH MARKETING
MANAGEMENTSales planning should be integrated with
marketing planning.
A companys marketing plan typically consist of
two basic groups
a) Field selling teams
Contacting existing and prospective customers
b) Head quarter marketing teamPerforms support and service functions or
activities to assist or help field salespeople in
their jobs in following manner
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CONTINUED----
Promotion
Consists of advertising, sales promotion, publicity
Marketing researchCollecting and interpreting information on
customers, competitors, products, markets and so
on
Marketing logistics
Physical distribution of finished goods including
warehousing, inventory, transportation.
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RELATIONSHIP SELLING
Buyers and salespeople, who do business together
have some type of business relationship
Transactional relationship/selling
Where after the product or service is sold, the
customer is not contacted again and hence the
relationship is not extended
Value added relationship/selling
In the case of value added exchange the focus is on
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CONTINUED----
the salesperson understanding the current and
future needs of the customer correctly and
meeting those needs better than the
competitiors
Collaborative/ Partnering relationship/selling
It means important or major customers need
continuous attention through partnering or
collaborative relationships.
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VARYING SALES RESPONSIBILITIES
Selling includes a variety of sales jobs, which aredifferent from one another.
Sales position
Delivery
Delivery of a product to household consumers orto business customers
Order taker
Acts mainly as an inside order taker, whoresponds to customer demands
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CONTINUED----
Sales support peopleExpected to build goodwill and educate thedecider, instead of the purchaser or user of theproduct
Technical sales support / sales engineer
High level of technical knowledge, professionalconsulting
Demand creator or Order getter
Actively seek orders, and use creative andproblem solving selling
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SALES MANAGEMENT OBJECTIVES
Sales Volume & Sales Growth.
Share of each product in the total volume.
Market Share.
Profits. Selling Expenses.
Key Accounts.
New Accounts.
Expansion of Channels.
Proportion of Cash & Credit Sales.
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After sales services.
Training of dealers &(Customer in some
cases).
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FUNCTIONS OF SALES MANAGER
Sales manager has to make a win-win situation fora) The owners and shareholders, through higher
sales at increased profits
b)
The consumers, by giving them a perception ofgreater satisfaction by the usage of the product
c) To the staff working along with him, to make
them feel they have delivered the best
d) To the trade, distributors, traders and sellers,
retailers by ensuring their profitability levels are
maintained
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CONTINUED----
e) Induction, training and placement of salesmen
f) Devising compensation policy. Promotionavenues and long term career plans
g) Controlling the field force
h) Direction and coordination of sales force
i) Link between top management and field
j) Advertising and sales promotion
k) Winning trust and confidence of trade andcustomers
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THEORIES OF SELLING
Is selling a Science Easily taught basic
concepts
Or an Art Learned through experience
In a survey of 173 marketing executives, 46%
perceived selling as an art, 8% as a science and
46% as and art evolving into a science
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TYPES OF THEORIES
Seller oriented theories
AIDAS
Right set of circumstances
Buyer oriented theories
Buying formula theory of selling
Behavioral equation emphasizes the buyer
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SECURING ATTENTION
Getting the attention of the prospect by making
favorable comments about the prospect
Proper dress, neatness, a genuine smile and a
cheerful expression
The objective of the first few minutes of the
meeting is to put the prospect into a receptive
state of mind.
It is always a good strategy for a salesperson to
make an appointment with the prospect
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GAINING INTEREST
Leads the prospects mind to second stage of
gaining an interest
Which aspects or factors of the product or
service appeals or attracts the prospect
Different methods are used:-
Carrying a sample of the product if it is not bulkyCarrying visual aids like CD, the product leaflet,
photographs
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CONTINUED----
Ask relevant questions to understand the buyers
needs or problems as well as to identify the
strongest appeal or interest.
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KINDLING DESIRE
The objective in this stage is to arouse a strong
feeling in the prospect of wanting to have the
product or service
Salesperson continues with presentation that
how his product/service can solve the buyers
problem
In this process, the buyer may raise some
objections, which need to be answered properly
If there is an external interruptions
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INDUCING ACTIONS
Buying action or closing the sale
Some salespeople use trial close to test whether
the prospect is ready to buy.
If no the salesperson continues with the
presentation to fully convince the prospect about
his proposal
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BUILDING SATISFACTION
After the customer has given the order, the
salesperson should reassure the customer that
the decision was correct
Thanking the customer for the order, and
attending to such matters as making certain that
the order is filled as written, and following up on
promises made
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BUYING FORMULA THEORY OF SELLING
Salespeople must understand that household
and individual as well as business or industrial)
buyers pass through certain stages or steps in
buying a product.
In consumer markets, individual and household
consumers make buying decision based on five
mental stages of buying process as follows
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PROBLEM (OR NEED) RECOGNITION
The consumer buying process starts when the
prospective consumer recognizes a problem or
need.
Salesperson must identify the buyers needs to
know what information about the product
benefits should be given so as to satisfy the
buyers needs.
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INFORMATION SEARCH (COLLECTION)
An aroused consumer will search for more
information.
For low involvement products it may be mild for
high involvement products the person may want
an active information search
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POST PURCHASE BEHAVIOR
After buying the product or service, the customer
experiences some level of satisfaction or
dissatisfaction
The salespersons job does not end when the
product is purchased
It is a known fact that the buyers satisfaction is
high, if the product perceived performance is
more than the buyers expectations.
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BUYING DECISION PROCESS OF BUSINESS
BUYERS
In business or industrial markets, the decision
making process includes three additional stages
as compared to the five stages of consumer
buying process
Determination of characteristics and quantity of
needed product or service
Development of specifications of product or
service, needed and
Obtaining and analyzing supplier proposals
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PERSONAL SELLING & SALESMANSHIP
Contents:
Meaning & Concept
Buyer-Seller dyads
Essentials of Personal Selling
Method of Personal Selling
Types of Sales PersonsPhases of Selling Process
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SOME IMPORTANT ASPECTS
It enhances customer's confidence in the seller
It promotes long-term business relations throughpersonal intimacy
It provides a human touch to businesstransactions
It helps facilitate the seller to understand each
customers needs and preferences more clearlyIt helps satisfy a customer by modifying theproduct as per the customers choice andpreference
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BUYER SELLER DYADS
Dyads describe a situation in which twoPeople interact
The Sales Person & the prospect
interacting with each other constitutesone example of Buyer Seller dyads.
In both Advertising & Personal Selling ,the Seller seeks to Motivate theProspective Buyers to behave favorablytowards the Seller.
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ESSENTIALS OF PERSONAL SELLING
Product Knowledge
Company Knowledge
Competitor Knowledge
Market Knowledge
Knowledge of Selling Process
Communication Skills & Selling Skills
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METHOD OF PERSONAL SELLING
Across the table Selling.
Counter Selling
Selling at the Door Step Auction Selling
Tender Selling
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TYPES OF SALES PERSON
Salesmanship:
It is the art of successfully persuading prospects orcustomers to buy product or services from whichthey can derive suitable benefits, therebyincreasing their total satisfactions.
Salesperson:Order Takers
Inside Order Takers
Delivery Salespeople
Outside Order Takers
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Order Creators:
Missionary salespeople
Order getters
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PROCESS OR STEPS IN EFFECTIVE SELLING
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PROCESS OR STEPS IN EFFECTIVE SELLINGSURAJIT
Prospecting &Qualifying
Preapproach
Approach
Presentation&
Demonstration
Overcoming
Objections
Closing
Follow up &
Maintenance 47
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STEPS IN PERSONAL SELLING
Successful personal selling calls for an
integrated approach devised from the experience
of the sales personnel.
Following are the steps involved in personal
selling
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PROSPECTING
Prospecting is the process to identifying
prospective buyers of the product.
The prospects are those who have a need or will
to buy and the power to pay.
Prospects may be individuals or institutions
There are different ways to identify prospects
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CONTINUED----
Satisfied customer can be a good source of
information
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CONTINUED----
This method of prospecting identifies the
customer segment to whom the sales personnel
might call upon without any reference but with
an anticipation of converting the call into a sale.
Also called random prospecting
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CONTINUED----
Using this approach, the salesmen obtain the
references for prospects from the eminent
people of society
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CONTINUED----
A salesman has ample opportunity to identify
prospects on several occasions such as
interacting with friends and acquaintances,
attending seminars, social gatherings, functions,
travelling etc.
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CONTINUED----
A salesman can contact prospective buyers on
the telephone and inform them about the
product range, plus the benefits and price of the
products available.
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CONTINUED----
The salesman can refer to the companys records
and get in touch with several old and new
contacts.
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CONTINUED----
There are several people who advertise their
requirements through newspapers
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PREAPPROACH
Pre-approach is the second step in the selling
process
it emphasis that the salesman should have
prospects personal information, after identifying
the prospect in the prospecting stage.
Based on all this information, the salesman has
the necessary tools to plan his visit/interview
with the prospect and can give an effective sales
presentation
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SIGNIFICANCE
Concentrates only on the prospects
Gain all the possible information about the
prospect
It does not waste the prospects time and energy
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APPROACHING
In this stage the prospect and the salesman
come in contact with each other face to face
Here the salesman has an opportunity to
understand and interact with the prospect in a
better way
Since salesmen are of two types, viz, the
traveling salesmen and the counter salesmen,
the approach adopted by each of these
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APPROACH ADOPTED BY TRAVELING
SALESMEN
Difficult to approach prospect since the
prospects are generally a busy lot
Prospects may not be interested in buying the
product
The salesman must keep on trying to obtain an
interview with the prospect
If the prospect happens to be a high ranking
executive or a senior officer
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DIFFERENT WAYS TO GAIN ACCESS THE
PROSPECT
May directly approach the prospect
Salesman can seek an appointment with aprospect could be by sending an advance mailer
explaining his product and its benefits vis--visother products available in the market
Can secure an appointment with a prospect than
through a reference given by the friend, relativeor business associate of the prospect
Another effective way is to give away gifts to theprospects before asking for an appointment
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CONTINUED----
Sale letters have proved to be another kind of
door opener.
Such letters provide ample detail about the
product, benefits and scheme available with the
product
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METHODS OF APPROACHING
1.Cashing in on brand name or the companys
reputation
2. Customer benefit approach
3. Innovative product opens the door to the
salesman
4. The premium approach
5. The shock approach
6. The survey approach
7. Interactive approach63
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PRESENTATION AND DEMONSTRATION
A good presentation is as important as a good
product
A good presentation can be in the form of
attractive packaging and display, conspicuous
placement of the product in the display window,
etc.
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REQUIREMENTS OF GOOD PRESENTATION
Conspicuous location
Attractively package, decorated and well
organized articles create a good impression in
the mind of the prospect
The salesman should explain the product with its
features and price advantage to the customer in
simple and easy terms
It is very important that the customer be shown
the kind of quality that he is looking for65
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CONTINUED----
Demonstrating a product helps create a positive
impression in the mind of the customer and
increases his interest
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OVERCOMING OBJECTIONS
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THE CLOSE
This is the last stage of any sales presentation
The main aim of the close is to convince the
prospect to sign the order form or to place an
order immediately rather than in the future
The salesman should be alert and use his good
judgment to spot an opportunity when he is in a
position to close the sale
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FOLLOW UP AND MAINTENANCE
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SALES FORECASTING
Contents
Concept of Sales Forecasting
Steps in Sales Forecasting Method of Sales Forecasting
Market Potential
Sales Potential
Market Identification
Market Motivation
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SALES FORECASTING
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SALES FORECASTING
According to Cundiff and Still
An estimate of sales during a specified future
period which is tied to a proposed marketing plan
Sales forecast are used by other functions i.e.,Manufacturing or Production
Finance
PurchaseHuman Resource Management
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STEPS IN SALES FORECASTING
Defining the Objective to be Achieved.
Dividing Various Product in to homogeneousGroup.
Analyzing the importance of various factors tobe studied for Sales Forecasting.
Selecting The Method.
Collecting & Analyzing the Related Information.
Drawing Conclusion from the Analysis made.
Implementing the decision Reviewing & Revising the Sales forecasting from
time to time.
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METHOD OF SALES FORECASTING
Survey Method
Expert Opinion Method.
Market Studies Method
Sales force Opinion Method
Statistical Methods
Trend MethodGraphical Method
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M k t P t ti l
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Market Potential:
A Market Potential is an estimate of the
maximum possible Sales Opportunities present in aparticular market Segment and open to all seller ofa good or service during a stated future period.
Sales Potential:
A Sales potential is an estimate of the maximumpossible Sales opportunities present in a particularmarket segment open to a specified Company
selling a goods or services during a stated futureperiod.
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Market Identification:
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Market identification Requires finding out:-
Who buys the Product?
Who uses it?
Who are the Prospective Buyers & Users?
Market Motivation:Why do people buy?
Why dont people buy?
How best to present the product in salestalk ?
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DETERMINATION OF SALES
Contents:
Sales Force Objectives
Sales Force Structure
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Sales Force Objectives
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j
Prospecting
Targeting
Selling
Servicing
Information
Gathering
Allocating
Sales ForceObjectives
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SALES ORGANISATION
Contents:
Meaning & Function of Sales Org.
Types of Sales Organization
Developing a Sales Organization
Field Sales Organization
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Organization
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Organization
Organization means the systematic coordination of thefunction essential to achieving organizational objectives.
The objective of the sales organization is theperformance of various activity necessary to promote
sales.Objectives of the Sales Organization
Define the line of Authority
Assure that all necessary activity are assigned &
Performed.
Established lines of Communication
To achieve coordination & Balance
To economize on executive time. 80
SETTING UP A SALES ORGANIZATION
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SETTING UP A SALES ORGANIZATION
Defining the Objectives
Determination of Activities
Grouping activities in to position
Assignment of Personnel to Position
Provisions for coordination & Control
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RECRUITMENT
Recruitment is the process of locating and
attracting job applicants
Recruitment and selecting a new sales force is
an important aspect of the sales managers job
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PREPARING THE JOB DESCRIPTION &
SPECIFICATION
Title of the job
Duties and responsibilities
Technical requirements
Territory to be covered
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RECRUITMENT SOURCES
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RECRUITMENT SOURCES
There are five main sources of recruitment
Advertisements
Advertisements are both a source of recruits and
a method of reaching them
Newspapers, magazines and trade journals are
the most widely used media
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FROM INSIDE THE ORGANIZATION S
STAFF
The advantage of this source is that the
candidate is familiar with the working of the
company and its product
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RECRUITMENT AGENCIES
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RECRUITMENT AGENCIES
Recruitment agencies provide bio-datas of
potential candidates for a fee
86
EDUCATIONAL INSTITUTIONS
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EDUCATIONAL INSTITUTIONS
This source includes management institutes,
universities and technical institutes.
This source is used for placement at the entry
level
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COMPETITORS AND OTHER INDUSTRIES
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COMPETITORS AND OTHER INDUSTRIES
The advantage of this source is that the
salesperson knows the market and its customers
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FRIENDS AND RELATIVES
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FRIENDS AND RELATIVES
If they meet the necessary qualifications
required for the job
89
PREVIOUS STAFF
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PREVIOUS STAFF
If they are willing to return
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SELECTION PROCEDURE
Selection, involves picking and hiring a few
people from the total number of candidates
applying for the sales job
Selection is done by comparing the requirementsof a job with the applicants qualifications
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STEPS INVOLVED IN SELECTION PROCESS
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STEPS INVOLVED IN SELECTION PROCESS
(a)Hiring profile
The aim of the recruitment process is to attract a
number of qualified candidates.
The manager should develop a hiring profile
system
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Quantitative Methods
1. Age
2. Education
3. Experience
4. Special qualifications
5. Abailability
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EXAMPLE
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EXAMPLE
Job applied for
1. May I have your name
2. Your address where you can be contacted
3. Telephone where you can be contacted
4. What kind of a job you are looking
Must be sales
5. What do you expect to earnMust be in line what is being offered
6. What are you earning now,is he being realistic !
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Quantitative factor
Age
Education
Experience
Availability
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Rating A- Excellent, B- Good, C- Fair, D- Poor
Traits Brief Notings Rating Background
Conversational ability
Personality
Qualifications
Experience
Overall suitability
Recommended for the position: Yes/No
Signature of the Interviewer
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(D) PSYCHOLOGICAL TESTING
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(D) PSYCHOLOGICAL TESTING
Psychological test is designed to measure such
skills and abilities in a salesperson as are found
to essential for successful job performance
Knowledge tests
Ability tests
Aptitude tests
In todays world most companies conduct
psychometric test to match job specs with
personal characteristics102
(E) REFERENCE CHECK
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(E) REFERENCE CHECK
Reference checks allow an organization to
secure information not available from other
sources
References are usually checked while theapplication form is being processed.
It may also take place prior to issuance of Letter
of Intent or Offer letter.
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(F) PHYSICAL EXAMINATION
Physical examination reveals whether or not a
candidate possesses the required stamina,
strength and tolerance needed under hard
working conditions.
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(G) JOB OFFER
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(G) JOB OFFER
When all other steps have been completed in the
selection process, the company must decide
whether or not to hire such an applicant
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SALES TRAINING PROGRAMM
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SALES TRAINING PROGRAMM
The purpose of sales training is to achieveimproved job performance
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AIM OF TRAINING
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AIM OF TRAINING
Represent the company better in the market
Higher turnover
Make salesperson aware of new product
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IDENTIFYING INITIAL TRAINING NEEDS
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IDENTIFYING INITIAL TRAINING NEEDS
Job Specifications
The qualifications needed to perform jobs are
detailed in job specifications
Trainees background and experience
Sales related marketing policies
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TRAINING ON COMPETITORS
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TRAINING ON COMPETITORS
The sales force should have sufficient knowledgeabout the competition.
Checklist
Competitor's Name
Product Name
What is the current % market share
Trend
Promotion strategies
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TRAINING IN HANDLING THE
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COMPETITION
Create new needs
Present the product differently
Wait for the right opportunity
Be prepared
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TRAINING METHODS
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TRAINING METHODS
Lectures
Trainees mainly watch and listen
Personal conferences
Trainer and trainee jointly analyze the problems
Demonstration
Appropriate for conveying such topics as newproducts and selling techniques
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ATTITUDES TOWARDS A COMPENSATION
PLAN
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PLAN
Salespeople look for companys attitude
1. Adequate income for adequate performance
2. Superior income for superior performance
3. A base of fixed income for security purposes
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DESIGNING COMPENSATION PLAN
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DESIGNING COMPENSATION PLAN
Designing a new compensation plan consists ofa number of steps as follows
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SET UP SPECIFIC OBJECTIVES
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S U S C C O J C S
An effective compensation plan should havespecific objectives for the sales people and these
objectives should be derived from the company's
sales and marketing objectives
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DECIDE LEVELS OF PAY OR
COMPENSATION
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COMPENSATION
A level of pay means the average pay or moneyearned by the salespeople per year (or permonth).
The level of compensation or pay should becompetitive to attract and retain good qualitysalespeople
Firms divide the levels of pay based on the
following factors
The levels of pay for similar sales positions in theindustry
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The levels of pay for comparable jobs in thecompany
Education, experience and skills required to do
the sales job
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DEVELOPING THE COMPENSATION MIX
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One of the key tasks in designing an effectivesales compensation plan is to develop the
compensation mix or the method by which the
salespeople will be paidWidely used elements of compensation mix are:
Salaries, Commissions/PLIs,Bonuses
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TYPES OF COMPENSATION MIX
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TYPES OF COMPENSATION MIX
1. Straight Salary
A salary is a direct monetary reward paid for
carrying out certain duties over a period of time.
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2. Straight Commission PlanPresent strong financial incentives in order toensure superior performance
A commission is a payment for the performance
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3. Combination plan ( fixed & variable pay)
68% of all companies use a combination plan to
pay their salespeople
Typically most companies follow below methods:
80:20
Or
70:30
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DECIDE INDIRECT PAYMENT PLAN
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Indirect payment plan, which is also called fringebenefits, perquisites, or perks, range from 25 to
40% of the total sales compensation package
Fringe benefits help satisfy safety needs andsecurity needs, although some contribute to
fulfillment of higher order needs
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Evaluating
After the new plan is established, it should be
evaluated on quarterly, half-yearly or yearly basis.
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Intensity refers to the amount of physical andmental effort the salesperson spends on a given
task
Persistence describes how long the salespersoncontinues to put forth effort
Direction suggests the salespersons choice of
direction of effort among various tasks
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IMPORTANCE OF MOTIVATION
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It has been observed that about 10-15 percentof salespeople are self motivated, while the
majority of salespeople are not adequately
motivatedThe company management recognizes the
importance of sales management and sales
force, because the financial performance of thecompany depends upon the achievement of
sales volume objective
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Sales managers find the task of motivatingsalespeople difficult and important due to thefollowing factors:
Changes in marketing environmentMarketing environmental factors, such asdemographic, economic, technological, political-legal, and social-cultural, change continuously
It is difficult to develop an effective mix of salesforce motivational methods in the changingmarketing environment
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Salespeople are required to achieve the
company objectives and goals, such as sales
volume, profits, and customer satisfaction.
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Unique nature of the sales job
Salespeople usually work alone and their
working hours are irregular.
Salespeople often face hostile and competingsalesperson
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Separate motivational package
Salespeople have individual characteristics that
influence their motivations.
Ideally, the firm should develop a separatemotivational package for each salesperson, but it
is difficult to meet each individual needs
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SELECTING AN EFFECTIVE MIX
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Motivational tools are usually divided into twobroad categories
1) Financial rewards/compensation
Includes salary, commission, bonus,and fringebenefits or perquisites
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B) Sales contests
Sales contests are short term incentive programmes
that can be an effective motivational tool
A sales contest should have a specific purposeThe design of the sales contest should consider the
following points
Each salesperson has an equal opportunity to winSales person do not use undesirable methods
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b) Certificate of accomplishment
An awareness that something has been achieved
successfully
It is an intrinsic motivation and a firm can onlyfacilitate
c) Personal growth opportunities
Many salespeople rank opportunities for
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d) Recognition
Most sales managers realize that they must pay
more attention to the individual salespersons
higher order needs, such as recognition,appreciation, and admiration.
Formal and Informal recognition
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e) Job Security
It is valued highly by older salespeople who are
nearing retirement age, but is least valued
reward among younger salespeople.
f) Sales meetings and Conventions
Companies use sales meetings and conventions
as an additional motivating tool to stimulate
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g) Sales Training Programmes
A good sales training programme increases the
performance of salespeople and in turn improves
their sense of self esteemh) Supervision
Through supervision salesperson understand the
personal needs and aspirations of eachsalesperson
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SALES MEETINGS AND CONTESTS
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Sales meetings are important both forcommunication and motivational purposes.
When sales personal are on the road without the
day to day opportunity for employercommunication and supervision, periodic group
meetings are valuable
They also provide occasions for motivatingindividual sales personnel through group
pressures
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PLANNING SALES MEETINGS
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Planning a sales meeting requires five majordecisions A-C-M-E-E Approach
1) Defining the specific training aims
In planning any sales meeting it is importantto have clearly defined objectives.
A new product may be about ready for
introduction or research may have uncoverednew insights on customer attitudes and
behavior145
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In setting a meetings specific aims, the effectiveexecutive answers three important questions
Are these aims clear and attainable?
Are they realistic in terms of time, audience, andother conditions?
Will the probable results justify the estimated
costs
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2) Content
Determining a meetings content is a matter of
planning its agenda
An agenda, by definition, is a list or an outline ofthings to be considered or done during a meeting
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3) Method
The methods(M) used in conducting a sales
meeting, of course, depend upon the aim and
content as well as upon the time available andmeeting place
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4) Execution
Execution decisions, outwardly trivial, contribute
significantly to a meetings success or failure
Among these seemingly trivial decisions is room
management
Herringbone,
Workshop,
Inverted U-Shape
Seminar or the British Square
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5) Evaluation
It is important , especially if management desires
to improve meeting effectiveness
The basis for evaluation should be whether themeeting accomplished its aims
To determine this, participant feedback is
necessary
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NATIONAL SALES MEETINGS
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The cost of bringing the entire sales force to acentral site are substantial, but national sales
meetings are sometimes appropriate
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REGIONAL SALES MEETINGS
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The trend is away from national and toward
regional sales meetingsReduce total travel costs and lowering lost sellingtime
Headquarter executives brought into directcontact with field personnel, learn about currentproblems at firsthand.
May have a program designed to emphasizeunique problems of that region
Increase participation time per person attending
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LOCAL SALES MEETINGS
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Local sales meetings are conducted weekly orbiweekly by district sales managers and last from
fifteen minutes to several hours
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REMOTE CONTROL AND TRAVELLING
SALES MEETINGS
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Certain forms of sales meetings retain the nationalsales meetings advantages while reducing its cost
and time expenditure disadvantages.
Among these forms are meetings conducted byClosed Circuit Television
The program is live at one meeting site and is
telecast to others, thus retaining much of the
inspirational value of the live show without incurring
costs and inordinate losses of selling time
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Sales meetings by telephoneTelephone conference calls are used for small
group meetings and discussions
Users say the group should be no larger thantwenty
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Sales meetings at homeSeeking to reduce the time and costs of sales
meetings, some companies mail recordings or
printed materials to sales personnel at theirhomes.
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SALES CONTESTS
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A sales contest is a special selling campaignoffering incentives in the form of prizes orawards beyond those in the compensation plan
The underlying purpose of all sales contests is toprovide extra incentives to increase salesvolume, to bring in more profitable sales volume,or to do both
Sales contests develop team spirit, boost moraleand make personal selling efforts moreproductive
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SPECIFIC OBJECTIVES
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Sales contests are aimed to accomplish specificobjectives, generally one per contest, within
limited periods of time.
Most sales contests aim to motivate salespersonnel:
1) To obtain new customers
2) To secure larger orders per sales call3) To push slow moving items, high margin
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4) To overcome a seasonal sales slump5) To sell a more profitable mix of products
6) To get reorders
7) To obtain more product displays by dealers
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CONTEST FORMATS
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Contest formats are classified as direct ornovelty
A direct format has a contest theme describing
the specific objectiveA novelty format uses a theme which focuses
upon a current event, sport, or the like
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CONTEST PRIZES
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There are four kinds of contest prizesCash
Merchandise
Travel
Special honors or privileges
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CONTEST DURATION
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Contest duration is important in maintaining theinterest of sales personnel
Contests run for periods as short as a week and
as long as a year, but most run from one to fourmonths
There are no set guides
Contest duration should be decided afterconsidering the length of time interest and
enthusiasm can be maintained162
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DESIGNING TERRITORIES
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A sales territory consists of existing and potentialcustomers assigned to a salesperson.
The territory may or may not have geographic
boundaries. However, generally a salesperson isassigned to a geographic area.
The basic concept of a sale territory is that a
territory or a market is made up of present andpotential customers
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REASONS FOR SETTING UP SALES
TERRITORIES
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The reasons for setting up and subsequentlyreviewing sales territories are as follows
1) Increase market or customer coverage
A well designed sales territory allowssalespeople to spend sufficient time with
present and potential customers, which
improves the market coverage
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2) Control selling expensesBy setting up well designed sales territories
salespeople spend less time on the road, fewer
nights away from home, resulting in less cost oftraveling and less expenses on lodging and food.
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3) Better evaluation of sales force performanceThe sales manager can evaluate the
performance of each salesperson in a better way,
when the salesperson is assigned to a specificsales territory
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4) Improve customer relationsWhen the salesperson spends adequate time
with present and potential customers, to
understand their problems and to find solutions ,their relationship improve.
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5) Increase sales force effectivenessWhen the sales territory is properly designed, the
salespersons workload is reasonable and the
conflicts are minimum as specific customers areassigned to them
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6) Improve co-ordinationThe company sales performance improves
substantially if the salesperson is involved in
coordinating various elements of marketingcommunication.
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7) Benefits salespeople and the companyProper territory design and allocation of
salespeople to territories will result in improved
sales force performance, which in turn benefitsthe company
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PROCEDURE FOR DESIGNING SALES
TERRITORIES
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The ideal objective in territory design is to haveequal opportunity and equal sales force workload
for all sales territories
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STEPS INVOLVED IN DESIGNING THE
SALES TERRITORIES
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1) Select a control unitThe first step in territory design is to select a
geographical territorial base, called control unit
that will be used in the territory analysisIn general the sales manager should select the
smallest control unit
Control units can be States, Metros, Cities, Towns
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2) Find location and potential of customersThe next step is to find the location and sales
potential of present and prospective customers
in each control unit.Information of present customers
Information on potential customers
Classify the customers based on their sales andor profits potential
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3) Decide basic territoriesThe third step in designing sales territories is to
decide basic or fundamental territories
This can be done by using either build up methodor breakdown method
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BUILD UP METHOD
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The basic territories are set up by building upfrom the control units. The objective to beachieved is to equalize the workload ofsalespeople.
The procedure is as follows
1) Decide call frequencies
It means how many times a customer should be
visited by the companys salesperson peryear
Various factors influence call frequency175
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2) Calculate the total number of calls in eachcontrol unit
This is done by multiplying call frequencies per
month by number of customers and 12 months3) Estimate workload capacity of a salesperson
A salespersons normal workload capacity is
estimated by multiplying average number of callsa salesperson can make in a working day by
number of working days in a year.176
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4) Make tentative territoriesIn this step, the company should group adjoining
control units (which share their borders) until
yearly number of calls needed in those controlunits equals the total number of calls a
salesperson can make.
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BREAKDOWN METHOD
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This is another method of territory design that isused by companies who have decided to have
intensive distribution strategy, mostly for selling
consumer productsThe objective is to equalize the sales potential of
territories
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The procedure is as follows1) Estimate the company sales potential for total
market
Estimate the company sales potential orcompany sales forecast for its total market by
using the sales forecasting methods
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2) Forecast sales potential of each control unitFor estimate the sales potential of each control
unit, the sales manager multiplies the total sales
potential of the company by a multiple factorbuying index of each control unit.
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3) Estimate the sales volume expected fromeach salesperson
Here the sales manager must estimate how
much each salesperson must sell, in order toensure profitable operation
For this, the sales manager studies the past
sales as well as the cost and profitability analysis
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4) Make tentative sales territoriesThe sales manager makes tentative territories by
combining adjoining control units until the sales
potential of each territory is equal to or greaterthan the expected sales volume from each
salesperson
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5) Develop Final TerritoriesThe tentative territories need to be adjusted due
to special considerations such as geographical
locations of customers, or unequal salespotential of some territories
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ASSIGNING SALESPEOPLE TO
TERRITORIES
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Once the sales territories are designed, the salesmanager is ready to assign or allocate individual
salespeople to each territory.
In any given sales force, salesperson differ inselling abilities and effectiveness. A sales person
may succeed in one territory and fail in another
territory, even though sales potential and
workload are the same in the two territories
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While assigning salespeople to territories, thesales manager should consider two criteria:
A) Relative ability of salespeople
B) Salespersons effectiveness in a territory
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RELATIVE ABILITY OF SALESPEOPLE
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A sales manager should evaluate the relativeabilities of a salesperson based on key factors
It should be understood that the weightage of
evaluation factors may vary from company tocompany and evaluation factors may also differ
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187
Product knowledge .15 .9 .135
Market Knowledge .10 .8 .080
Past Sales
Performance.40 1 .400
Communication .15 .8 .120
Selling Skills .20 .9 .180
Total 1.00 .915
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SALESPERSONS EFFECTIVENESS IN A
TERRITORY
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The sales manager should judge theeffectiveness of a salesperson by comparing the
salespersons social, cultural, and physical
characteristics with those of the territory
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SALES QUOTA
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Sales quotas are sales goals (or quantitativeobjectives) set by a company for its marketing
units for a certain period of time
A marketing unit includes a region, a territory, abranch, a salesperson, a distributor, or a dealer
Sales quotas can be set on sales volume,
expense, profit margin, customer satisfaction,and combination
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Annual sales quotas for each marketing unit arebroken down to quarterly and monthly quotas
Sales quotas are developed from the annual
marketing plan of the companyAfter preparing the sales forecast, the company
decides its sales budget, which includes the
companys sales volume and selling expenses.The company sales budget is then broken down
to sales quotas for regions and sales territories.190
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Each territory manager divides the territorysquota among the sales persons, distributors, and
dealers, who are attached to the territory.
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MAKING AVAILABLE PERFORMANCE
STANDARDS
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A sales quota makes available to the salesmanager a tool to measure the performance of
the salesperson.
A quota also provides a goal to the salespersonHence, a quota is a performance standard,
against which the actual performance is
compared
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CONTROLLING PERFORMANCE
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By setting quotas for salespersons activities,sales volume, and selling expenses, the sales
manager is controlling the performance of
salespeople.Similarly, to check wasteful expenditure on
customer entertainment, lodging, and meals,
expenses quotas are set as a percentage of
sales
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MOTIVATING PEOPLE
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Sales force compensation is often tied to theextent or degree of achievement of sales quotas
Sales manager should not set sales quotas that
are too high and non attainable.
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IDENTIFYING STRENGTHS AND
WEAKNESS
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When actual sales performance is comparedwith respective quotas of different territories and
salespersons, the sales manager can identify
successful and unsuccessful performers
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SALES VOLUME QUOTAS
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Most companies have sales volume quotas forindividual salespersons, distributors, retailers,
geographical areas, or products, for a specific
period of time.For effective control, it is proper to set sales
volume quotas for the smallest marketing unit
Companies set sales volume quotas in Rupees orDollars sales volume, unit sales volume and or
point sales volume
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RUPEES/DOLLARS SALES VOLUME
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When salespeople are required to sell manyproducts, it is easier to manage if quotas are set
in rupees or dollars
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UNIT SALES VOLUME
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Companies set sales volume quotas in units ofproducts in three situations
When salespeople are selling a few products
When prices of the product fluctuate rapidlyWhen the price of each product or service is very
high
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POINT SALES VOLUME
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It is used in a situation when the company wantsto improve its profitability, by asking salespeople
to sell more those products that relatively
contribute more to the profits
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FINANCIAL QUOTAS
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Financial quotas are the goals set to controlgross margin or profit contribution, and expenses
of various marketing or sales units
Can be of two types
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GROSS MARGIN OR PROFIT
CONTRIBUTION QUOTAS
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Gross margin quota is decided by subtractingcost of goods sold from sales volume.
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EXPENSE QUOTAS
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The objective of setting expenses quotas is tocontrol the costs of marketing or sales units,
such as sales territories and salespeople.
Often expense quotas are used along with salesvolume quotas, so that selling expenses are kept
in line with sales volume
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ACTIVITY QUOTAS
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Many companies set activity quotas so as todirect salespeople to carry out important job
related activities.
These activities are useful for achievingperformance targets of salespeople.
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COMBINATION QUOTAS
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Companies set combination quotas or goalswhen they want to control sales force
performance on both key selling and non selling
activities
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THANK YOU