SALES MANAGEMENT

- Decisions, Strategies& Cases Studies.

- Authors Richard R Still.

Edward W. Cundiff Norman A.P.Govoni

Introduction
Sales Management is very important to become a

Professional Sales Personnel. To understand sales function in an organisation. To become an enterpreneur. To understand Business nuances,strategies, Teamwork,markets,products,people. To make profits.

Do sales Executives Are Professionals?

Sales Exceutives- a)Plan b)Bulid c)Organise

Adopts Effective control procedures.

Approach as a professional. a)Personal selling objectives

b)Appropriate sales priorities

c)Personal selling strategies.

Sales Executives Responsibility

Customer

Society

*Sales Volume *Profit Contribution *Continous Business Growth Resources--- Wholesalers/Retailers/Industrial/govt etc; *Selling social Responsibility&Social Responsible products.

Sales Department
An evolution for economy

Enterprise domination
Selling an easy job Man power is less

All jobs are self centered

Era of Revolution
In 1760 In England industrial revolution.

American revolution in the US.

Problems of Hiring labour. Acquiring Land

Buliding and machinery.

Capital Revolution became an evolution paved way further

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

Objectives of SM
Key function of any enterprise.

Manufacturing
Retailing Wholesaling

Distributing
Pricing Profiteering &Growth.

Objectives of Sales Management

-

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

Responsibility of Top Management

Accountable for success &Failure of the org.

Increase volume of sales with social responsible

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

Contd..
3)Capability to achieve 4)Competition &Price 5)Influence of middlemen 6)Channel management. 7)Offers of freebies. 8)Marketing startegies. 9)Collections.

Contd..
Result= Volume*price= total value Gross margins&Net profit in value. Other Functions of S.E: a)Prospecting b)Communication c)Selling d)Servicing e)Monitoring f)Allocating/Distribution

Functions Of S.E
Prospecting:

- Finding Right customers.

- Creating awareness

Communication; -Passing on info for Products &Services. Selling: -Involves Personal salesmanship to sell. Servicing: Pre&Post sales service.

Contd.
Monitoring:

- Taking stocks of product/sales

- Competitors product information

Allocating&Distribution: -Supplying products to the network - Inventory mangement. - Logistics

Organisation& Co-ordination
a) Deptmnt co-ordination- External/Internal

b) Top mangement decision making

c) Decision on circumstances. d) Co-ordination of Other Elements.

*Planning &Co-ordination: -Knowledge of the market. -Mktg Programms -Achievment of Predetermined sales/Profits&Growth. -

Co-ordination with elements

a)Personal selling&order getting methods

b)Build co-ordination into Mktg Plan.

C)Execute promotional plan. d)Displays/ POPs

E) Incentives coupons etc

F) Festival offers/ stock clearance sales.

Co-ordination Of Distribution of Network

a)Gaining Product Distribution

B) Retailers,Middlemen.
C)Forced Distribution/Pull Distribution d)Missionary &Instutional selling.

e)Demand buliding for New Product.

Qualities Of Effective S.E

Relationship with Top Mangement

Relationship with other departments like;

a)Production dept b)Mfg dept c)Distribution dept c)Marketing dept d)Humanresources e)Logistics etc; On the whole it is very essential that he shall act as a brand ambassador of any organisation.

Sales Organisation
*A good sales organisation is essential if management has to proceed in an orderly &effective pattern towards attaining its Marketing Goals. *The sales organisation is the Vehicle through which strategic plans are translated into selling operations in the market place. *Its a group of individuals striving to achieve qualitative&quantitaive objectives.

Contd
*A team work where every member performs to their potential for the profit of the organisation. Purposes of Sales organisation: a) To develop specialists- As tasks groups in nos, they are broken down into maneagable units,are alligned into to specialised personnel.These assignments are called Delegation Of authority

Contd..
b) Should focus as an Informal organisation thro intelligent leadership and human relationship c)Specialists are required to reshape the organisation and professional to implement the task. d)The tasks are broken into maneagable limits and given to specialised personnel.

Achieve Co-ordination or Balance

a) Good arganisation achieves co-ordination or

balance. b) Organisations achieves its accomplishment thro collective efforts as a team rather independently. c) Motivation leads to better perfomance and coordination in the organisation. d)Modern management suggests sales deptmnt-

Contd
-small and free communication to reduce uncoordinated proliferation. Define Authority: Line Staff Functional Line Authority: Carries the power to require execution of orders by those down the line personnel in the organisation.

Contd
b)Staff Authority: Is the power to suggest to those holding line authority and the method of implementaion of orders. c)Functional Authority:Enables Specialists in a particular areas to take decisions. eg:Technical services

Sales Organisation- Steps

1) DEFINING OBJECTIVES

2) DELIENATING NECESSARY ACTIVITIES

3) GROUPING ACTIVITIES INTO JOBS AND

POSITIONS 4) ASSIGNING PERSONNEL TO POSITIONS 5) PROVIDES CO-ORDINATION AND CONTROL.

Defining objectives
a)General objectives of Top Management. b)Vision of the company. c)Higher market share. d)Reputation Building. e)Diversity of product lines ex; Tatas, Birlas, ambanis etc: f)Industry leadership AirTel, Holcim,Sony,Maruti udhyog etc;

Deleinating Objectives
a) To define qualitative and quantitative objectives.

b) Required Executive positions

c) Relationship positions d) Duties and responsibilities.

e) Analysis the volume of performance in each

department.

Grouping Activities
a)Activities identified as necessary are allocated to Direct Positions. b)Closely related tasks assigned to same positions. c) Sufficient no of taskls are required when large no position is set up.

Selection Process
Selection Recruitment Training Supervision

Job description

Job Specification

Job Evaluation
Compensation Motivational progm.

Job Analysis
Performance Evaluation

Buyer- Seller Relationships

Attention

Interest

Desire

Action

Satisfaction

Contd.
Mc Murray &Arnold says Different Sales Positions

require different amounts and kinds of service and developmental skills in selling
Aidas Theory is a basic tool which can be achieved

only by acts of courtesy,enthusiasm,confidence & communication only.

Contd.

Attention:

-- Attention of a prospect --Feel the pulse of a customer --Find out customerss need If there is a need a solution arises . If no need No problem, no sale. Ex; Water

Contd..
Interest Stage: The prospect must be interested in your propostion. Customer is involved, participate, become curious,wants to know more. Ex; Driving A car at the show Room.

Contd.
Desire Stage: Can be aroused which makes the prospect to think about purchasing product or services. Create the awareness of potential gain called Romancing the product Ex; a) Success Strories---- MRF b)Illustrations gain ----- Ariel c) Prevention of losses LIC d) Unique services------- Mobile Phones

Contd..
Action: Product or services shall remain in the

Shelf space or expire unless sales personnel creates justification for action. Sales Persons should understand: a) Buying signals b) Power of observation c) Ability to listen d) Physical signals or vocal symptoms

 Satisfaction:

Sales personnel assurance to customer that his decision is correct. Ultimately the customer feel satisfied with the sales persons Consultative selling Approach If a customer is a King the what the sales person should be?

Theory of Selling
a)Right set of circumstances b)Buying Formula c)Behaviour equation d)Buyer seller Dyad &Reinforcement e)Influence of sales person f)Reducing Buyer Disonance.

Why People Buy?

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

etc; 2) Pride-To Satisfy the EGO or To BE the Best 3) Fear-To compete with others. 4) Imitation-To increase social standing/enhancement of self image. 5) Pleasure-To gain more comfortable experience.eg Car/ Two wheelers/Jet planes/Ships etc;

Contd.
a)Market Potential- An estimate of the maximum possible sales opportunities present in the market segment which is open to all sellers of a particular goods or services during a stated future period. b)Sales Potential-An estimate of maximum sales opportunities present in a particular market segment open to an enterpreneur or company who sells product or services. c)Sales Forecast-An estimate of sales in value,dollars,units for a future period under a particular mkts where forecast is made.It can be short term or long term, for a single or multiple products.

PROSPECTING
Effective planning is done

To strectch Productive selling time

Elimination of nonbuyers is called prospecting.

Benefits: a)Salespersons can apply their selling efforts productively b)Prospecting can create Data base for future business Opportunties. Professional SPs are sucessful in prospecting.

Steps In Prospecting
1)Formulating Prospect Definitions 2)Searching Out Potential Clients 3)Qualifiying prospects &determining probable requirements. 4)Relating company products to each prospects requirements.

Formulating/Searching/qualifying/Realting .
Prospective customers must have the willingness,financial capacity

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

Sales person differentiates sources for the names of probable prospects or suspects Can be obtained from various sources of business directories,credit reports,chamber of commerce directories,manufacturesrs association,yellow pages etc; Another sources thro endless chain with reference of satisfied customers.

Qualifying Prospects
Information of each tentative prospect &probable

requirements of each product. Converting probable requirements into business Personal visits by sales persons for any special requirements of the prospects. Prospects are separated from non prospects.

Relating products to Prospects

Final step of prospecting Information is correctly assembled to determine each

prospective needs. Sales persons presentation is now easy to construct, and it is tailored to fit the prospect. Sales person should have clear ideas about specificobjections the prospect may raise and other obstacles to sales that may be encountered. Finally the sales person shall be ready to persuade the prospect to become a customer.

The Delphi Technique

Several years ago researchers at The Rand corporation developed a technique predicting the future is called Delphi Technique. a)Roll of Sales force opinion: The method is tagged to Grass Roots Approach which gives individual sales forecast of territories. b) Projection of Post Sales: Simple projection method is next year sales= present year sales x present sales divided by last year sales.

Time Series Analysis

A common device of mathematical projections of

future sales. It involves projection of past sales trends into future. To predict future sales: 1) Seasonal variation 2)Change in business cycle 3)Longterm trend sales 4)Irregular or unexpectedvariations.

Exponential Smoothing
-Another method of sales forecasting. It represents the weighted Sum of all particular nos in Time series with the Heaviest weight placed on the most recent data. Method is useful in forecasting large number of items are made. Evaluation of Past sales projection methods: -The limitation of all past sales projection lies in the assumption that past sales history is the sole factor in influencing future sales. -No allowance is given for significant changes made by the company in its marketing programm or by its competitors in theirs.

Product Market Analysis

Can a person is capable of selling all kinds of products To all kinds of customers? Sales personnel -------------Some Products ----------- Some Customers

Sales Personnel- Specialists

Product Highly TECHNICAL

Market Different customers Unique

Product+Market Skills (Tech) + Market

Contd
Determination of type requires a)Interdependence

dimension b)Expertise dimension. 1)Choice Of Basic Selling Styles: - Trade Selling - Missionary Selling - Technical Selling - New Business selling

Contd..
Trade Selling: -Sales person develops long term relationship with stable customers. - Job is dull & routine - Selling style predominates in well established markets - SPs provide promotional support to customers. - Missionary Selling: - Sps objective is to increase Cos sales volume by assisting customers with their selling efforts.

Contd..
Technical Selling:

-Sps deal primarily with established accounts. - Provides technical assistance to increase volume of business. - Sps spend time for tech details of products with customers &detail them with all parameters. - Specialise on products/ markets. - Some Sps specialise in Govt accounts.

New business selling

- Sps find and obtain new customers. - Convert prospects to customers. - Sps are creative,genius,highdegree of resource fulness. - Cos may consider the existing person for the Job.

Closing Sales
Closing sales is an Art. For every hour i spend in front of a customer ,i probably spend five hours getting readyLeo Kelly Top sales person in Zerox Business. -Low pressure sales closed early than high pressured ones. -High pressure sales leads to prospect emotions Sps propel prospects into buying decisions. -Closing time each gives the other the signal yes or no. -Closing time provides tangible time of selling skills. - Prospect gives buying signal to close. - Sps gives feelers to close with clues

Contd.
Sps gives indirect close without asking order from

prospects Close the sale sensibly,written document agreementpayment etc; Closing of sales is an art.

Personal Selling Approaches

A Companys competitive posture is shaped by a)Competitive setting b)overall mktg strategy c)Effectiveness of implementation. Mktg department is dependant on sales force to achieve personal selling objectives. a)Competitive&Personal selling objectives: Pure competition Monopolistic competition Oligopolistic competition No direct competition

Contd.
a)Pure competition: 1. No single buyer or seller affects to total demand or supply. 2. Products are identical- Gas/ petroleum products 3. No artificial restrints on price 4. All buyers are informed sellers price. b)Monopolistic competition: 1. Mc exists when there is a large no of sellers of generic kind of product,but each sellers brand is some way different from other brand. 2. Eg; Pain killers, iodised salt,Talcum powder,Each companys uniquely appeal to customers in a different way.

Contd
Oligopolistic Competition: 1. A competitive setting where the no of competitors are small enough that they are individually identified and known to each other and it is difficult for new competitors to enter the market. 2. Eg;Computers,automobiles,soaps and detergents,steel,aluminium etc; 3. Oc produces most aggressive competition. 4. Changes are easily noticed in all selling/mktg activities. 5. Personal selling plays an important role in buliding relationship with dealers distribution,information&promotion.

Contd
No direct competition: 1. Neither monopoly nor the company mktg is radically new ,differentproduct &has no direct competition. Analysis of Sps Role in Securing Orders: a) Company Aggressive Order getter Casual Order Getter b) Industrial produts->Sps plays minor role c) FMCG Sps-------- Plays major role to satisfy middle men. d)Sales Engineer----- Advisor to middle Men/Consultant

Types Of Specialisation In Selling Organisation

Dominant Interdependence Dominant Expertise Between Customers Between Products

Product Technologies

Product Specialists

Customer Applications Customer Specialists

Full Line Sps Supported By MGRs Supported By SpL kind of Customer

Personnel Management In Sales Field

Sales Force Management -- Economies

- Role Involverment Law

SFM: - Individuals as SF plan their own activities - Sales Personnel are affected with phsycological pressure,fly,customers,boss etc; - Sf are selected as per qualification required,trained,compensated with appropriate levels. - SPs productive time, working methods etc;

Contd..
Economies: 1. Contribution per person is calculated on volumes given,calls made,turnover etc; 2. Compensation are salary, commission& calculated as average cost per call/Per personnel 3. Maintaining sales force with two types of expenses a) Fixed b) Variable 4. Fixed: Salary/travel/sales folios/manuals/ 5. Variables: Commission/training/supervision allowance etc;

Role Of Sales Personnel Turn Over

The rate of Sps turnover is a measure of the quality of SFM. Ex: Employment of 250 persons with 20 attritions a year the turnover is 8% The TO influences the total expenses of SFM. The expenses of SPs TO can account for a significant drain on profits. Awareness of current turnover is essential for a study. The personnel attrition is periodically analysed periodically to determine the causes. MGMNT should take corrective action to reduce the attrition.

Involvement Of SE in SFM
Involving SEs in SFM is important like responsibility, Commitment,participation,planning &implementation Semi Variable Costs: a) Mixture of variable&fixed costs. b) Change or vary in volume but fixed in direct proportion to volume of sales. c) Vary less than proportionate ratio d) Less controllable than variable cost &more maneagable than fixed costs.

The Law &Sales Force Management

EEOC- Equal Employement opportunity

commission. OFCC Office Of federal contract compliance assists employers to implement ploicies and not to select on the basis of cast,race,colour,religion, gender or origin. EEOC applies to 25 persons or more. OFCC Applies to 100 persons or more. Discrimination on the basis of age is prohibited by the age discrimination in employement act.

Job Analysis
An analysis which requires information of specific jobs, written description with regard to qualification, characteristics of job &also provides hiring, transfers, promotion, training, dismissals 1)Sales Job Analysis: a) The duties & responsibilities of sales person. b) Difficulties to be faced by him/ her while performing duty. c) Personal traits to perform job satisfactorily. d) Thorough job description to be performed by salesmen.

Job Description
1) Reporting Relationship.

2) Job Objectives.
3) Duties & Responsibilities 4) Performance Criteria.

5) Performance Measure.

The check list consists of : a) Sales b) Service c) Territory Management

Contd.
d) Sales promotion e)Executive Preparation f)Goodwill.

Econometric Model Building &Simulation

An attractive sales forecasting methods for cos marketing

durable goods. Basically attempt to express economic theory in mathematical terms. Verified by statistical methods & predicts future event. Econometric models are quite complex &expensive to develop. Predicts turning point accurately. Model used in industrial products, consumer durables where Replacement Demand is a significant factor. S= R+N S= Total Sales, R= Repalcement Demand, N= New owner demand.

Recruitment Of Sales Personnel

Recruitment and selecting Sps are an important part of implementing personal selling strategy Recruiting is a process by which a fair secure pool of applications to be considered for hiring. A suitable Form has to be made where methodology of selection is given with all relevant details of the candidate with assesment form for evaluation.

Sources of sales force recruitment

Sources within the organisation: Company sales personnel- Other cos sales people recommendation. Company executives --- Recommendation from Sr Mgrs, Vps , President etc; Internal transfers Sources outside company: Direct unsolicited application- Walk in interviews Consultants Campus interviews Job websites News paper advertisements

Interviews
Initial Intensive Patterned Non Directive Stress Rating scale TESTS

Tests
Intelligence Achievments Interest Personality Types of Tests: 1) Abstract Intelligence- Flexibility or versatility in the case of symbolic process. 2) Mechanical Tests - Ability to deal with concrete material. 3) Social Intelligence Test or ability to deal with human realtionships 4) Interest Tests - Measure of interest in comparison with successful people. 5) Sales Aptitude Tests- Present knowledge in selling and behaviour in a given situation.

Determining The Size Of Sales Force

Management decides the size of SF in the personal selling strategy. 1. Work load method 2. Sales potential method 3. Incremental method i. Work Load Method: Assumption is all Sps should take equal work Management estimates the total workload method Involved in covering the entire market, then divides the work load to individual Sps and determines total no of persons required.

Contd
2) Sales Potential Method: Is based on assumption that performance of the set of activities contained in the job represents 1 sales /personnel per unit. The total turnover can be estimated for each Sps to contribute towards companys growth. It can summarize as n= s/p+t (s/p) n= s/p (1+t)

n= no of sps /units s = forecasted volume p= estimated sales productivity/per sps /unit t= allowance for rate of sales force turnover
In a growing company, potential sales volume often depends on the ability of sales staff bringing the volume of business and turnover.

Incremental Method
Is the best approach to determine sales force size. Based on one proposition Additional sales force = Increase in net profit If incremental sales revenue exceeds the incremental cost incurred. Incremental revenue -----Incremental costs.

Motivating Sales Personnel

Motivation: Is that force within us that directs our own behaviour. Sources leads to needs,wants &actions. Internal drive with selection of behaviour. It is the complex of needs &desires,stemming within individuals leads them to act,to satisfy the needs&desires.

Factors Of Motivation
Factors relating to job: Job satisfaction/skill/Task

etc; Factors relating to organisation: Sps work environment& relationship skills.

Factors relating to environment: Territory, work load

conditions. Factors relating to personal characteristics: Promotion &Financial rewards.

Motivation From Management

Management offers help Sps to reach& achieve

acceptable performance levels. Motivation is needed to individual or group. Management converts sales group as an effective sales team thro motivation. Performance leads to quality which affects the Sps in 4 ways. a) Inherent nature of sales job. b) Boundary position 0r Role conflicts c) Apathy Tendency d) Group identity feeling.

Contd..
a) Inherent Nature:

1.
2.

3.
4.

5.

Every sales job faces ups &Downs, feeling of exhilaration &depression. Dealing with pleasant & arrogant people. Feeling of frustration with competing sales personnel. Extra time on job &less time with family. Reaches non-selling positions due to lack of motivation for sps.

Boundary Position or Role conflicts

Boundary Position refers dealing with people in

1) sales management 2)order fulfillment 3)customers 4)Other cos Sps. Sales persons faces different people with different wave length at time leads to conflicts. Conflict of identification arises out of multi group membership. Advocacy conflicts arises when Sps identifies customers position to other groups in the company. Conflict is inherent in Sps dual role between company &customers.

Contd.
Apathy Tendency (Lack Of interest)

-> Meeting same customer, territory -> Over confidence about customers, less investment on salesmenship. -> Customers lack of interest towards salesmen. Group Identity feeling: -> Sps maintain relationship with group to identify himself. -> Sales managers provides motivation individually to attain group standards. -> Co-operative Endeavour ,group feeling is essential to achieve objectives of management continuously.

Hierarchy of Needs
PRIMARY NEEDS- Food,

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

SECONDARY NEEDS-

Safety,security,belongingness,social relations,self esteem, Self respect etc; ( Not inborn but develop with maturity) An understanding of Maslows hierarchy of needs helps us to classify customers needs and satisfy them more effectively

Hierarchy Of Human Needs- A.H.Maslow

Self actualisation Needs Esteem Needs Belongingness &Social Relations Needs

Safety & security Needs Basic Physiological Needs

Contd..
1. 2. 3.

Basic Needs --- > Food/ water/clothing Safety & Security Needs Security of job/ Protection

Belongingness& Social needs-> Friendship/ love/affection 4. Esteem Needs ---- > Self respect/status/recognition/achievment 5. Self Actualisation --- > Growth, Fullfilment of ambition.

Contd
As a particular need is satisfied ,it looses its potency as a motivator,but other needs unfulfilled,new ones gain in potency. Individuals continously try to fullfill larger portion of their need structures & the unsatisfied portion exerts strongest pull Theories Of Motivation: Dougals Mc gregory proposed two different theories in the year 1960.. Theory X Theory Y Basically it expressses the human nature.

Contd.
X Theory involves --- Negative Aspect Y Theory involves -- Positive Aspect
Human Behaviour

X Theory : Assumptions by Managers on workers 1. Dislike Lazy work 2. Workers should be controlled&punished 3. Seeks directions from bosses always &avoid responsibilities. 4. Security of job gains importance & ambition gains minor imporatnce.

Contd
Y Theory: 1. Workers can work as natural,rest&play. 2. Workers can exercise self-direction,self control in a given environment. 3. Accepts responsibilty &lean to grow 4. Creative,imaginative & Resourceful. The theories are nothing to do with motivation but explains nature human behaviour under two different assumptions.

Motivation Hygiene Theory

Self Actualisation Esteem Social Security Physiological (Maslow Model)

Fredrick Herzberg and his co-researchers developed Motivation Hygiene Theory

Motivational factorswork,growth,responsibilty Hygiene Interpersonal,peers,boss,su bordinate,policy,job security

life.

,salary,personal

Contd
Deficiencies in fullfilling the Hygiene Needs cause job disatisfaction. Mangement to ensure the condition to prevent job disatisfaction.

Achievment Motivation Theory: David Mccleland developed the theory. The Theory says three Basic Motivation needs; a) Power b) Need for Affiliation c) Need for achievment . David says the Need For Achievment, gains maximum importance. Need for power has a great concern for excercising control&influence. People with affliation keeps pleasnt relationship.

Contd
People with high need for achievment have strong

desire for success, love challenges. Mclelland used Thematic APPerception Test called TAT in the research. Vrooms expectancy Theory: Victor Vroom proposed this theory as an alternative to the consent methods /models. Widely known as a Theory of motivation to understand the purpose of motivation.

Contd..
The theory says a persons desire to work at any time

controlled by two factors. a) Existence of one or more personal goals on the part of the employee. b) Expectation as to the relative worth of his performance for attainment of such goals. Vrooms Model: Force(motivation)= valence multiplied by expectancy. The term Valence stands for an outcome of action will lead to desired outcome. a) Efforts b) Performance c) Rewards d) Goals

MOTIVATION & LEADERSHIP

Trait Theory:

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

STYLES
Authority 2. Behaviour 3. Others Motivation &Communication: It is important that any Sps should be a good communicator The word communication has been derived from the latin word Communis which implies common or transfer of information from sender to reciever
1.

Contd.
Peter Little defined Process thro which info is

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

Process Of Communication

Feedback

Sender

Message

Reciever

Under standi ng

Barriers

Interpersonal Contact
Management uses contacts to make comprehensive

evaluations of individual sales people morale. Sales supervisors, managers apart from regular routine job makes personal contact of Sps. Interpersonal contact is the best way to keep in touch with the sales staff . Certain occassions Sps are contacted over phone. Motivational interviews are conducted to gather into bit by bit.

Written Communication
A method of communication given in writing form;

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

Better Communication
Robert Feller says Every body communicates in one

way or another, but few deliver their messages as well as they can. Good communication is life blood of the organisation It takes forms such as speaking, writing &listening. The purpose is always to convey a message to recipients. It can handle information & improve relationships.

Achieving clarity
The three rules that govern good communication are all associated with clarity. 1. Be clear in your mind about what you want to communicate; 2. Deliver the message succinctly. 3. Ensure that the message has been clearly &correctly understood Good communication means saying what you mean-& Fully comprehending any feedback.

Choosing Methods Of Communication

Written Word In any language various media,the written word is basic to literate socities

Spoken Word

Symbolic Gestures Any positive or negative behaviour that can be seen or heard by the intended target

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

Visual Images Images that can be percieved by target or group

Multi Media A combination of the different Methods above ,often involving IT Information technology

Examples
Examples Usefulness
The written word is the

a)Written Word Letters,memos,notes,contract s,summaries,agendas,notic es,regulations,minutes,pla ns,discussi-on,documents b)Spoken Word Conversations,interviewsmee tings,phone calls,debates,requests,debri efings,announcements,spee ches.

basis of organisational communication,used because it is relatively permanent&accesible. Verbal exchanges in person and by phone are used because of their immediacy,they are bthe chief means by which organisations work on day to-day basis.

Contd
Examples
c)Symbolic Gestures: Gestures,facial expressions,actions,tone of voice,stance,posture,movement,immobilty,presence,absence. d)Visual images: Photographs, paintings,drawings,illustrations,graphics,c artoons,videos,logos,film,doodles, Collages,colour schemes. Multi media: Television,newspapers,magazines,flyers, posters,internet,intranet,world wide web,video,radio,cassttes,CD-roms.

Usefulness
Actions and body language profoundly but unconsciously affect peoplepropoganda depends on the manipulation of positive &negative signs. Visual images are used because they convey powerful conscious& unconscious messages. Media are especilally useful when they can be participative. The more &professional the use of multimedia,the more effective &productive they are likely to be.

Compensating Sales Personnel

Sales compensation plan is an essential part of the

sales personnel motivation Sales Company Personnel Role: 1) Providing Living wage 2) Adjust pay levels to performance 3)Provide a mechanism to compensate& achieve company goals. Sales compensation plan are aids to rather substitutes for effective motivation. In established organisation sales compensation are periodically revised. Major changes are rare unless sweeping changes are required.

Contd.
Living habits may vary if companies changes to

salary to commission. Changes may occur to revive,restructure&cultivate Sps in different markets.

Requirement Of Good Compensation Plan

1) Living wage

2) Secure Income
3) Motivation 4) No penalisation of Sps

5) Easy To understand Plan

6) Payment as per Performance 7) Attain of objectives of cos

Define The Sales job Compensation

Nature of sales job

Job description
Job objectives Written&Oral description

Sales volume objectives (units,dollars etc;)

Policies to be carried out Goals,duties& activities

Companys General Compensation Structure

a)There are four job evaluation methods Two are quantitaive & Two are Non-Quantitative. 1. Factor comaprison method 2. Point System Quantitative

1. 2.

Simple Ranking Method Grading Method

Non Quantitatve

Contd..
Simple Ranking Method: Inexpensive job evaluation method done without considering individuals currently in their jobs or their compenstion levels. Widely used in small businesses. 2. Grading: The approach is to compare individual jobs &utilise a system of grade descriptions
1.

Contd
1.

Point System: The point system is the most widely used job evaluation method in many organisations .It involves establishing &defining the factors common to most jobs that represent the chief elements of value inherent system in all jobs. It includes a) Job knowledge b) Responsibility c) Communication skills d) Physical skills e)Personality f) Educational qualification g) Other skills etc;

Contd.
2. Factor Comprising Method: The method resembles point system but is more complex.It utilizes a scheme of ranking & cross comparisons to minimize error from faulty judgement.The scale values are with total earnings and no upper limit exists.Allocation of compensation relates eachjob. 3. Job Evaluation & Slaes Positions: Job evaluation occurs whenever decisions are made about the relative worth of jobs.

Contd.
It is in escapable in an organisational life.

Informal evaluation exists where Formal evaluation

is not used. Sps disagree formal evaluation quoting a) Supply demand factors b) greater job mobilty. Formal Job evaluation includes job or salespersonnel. Sales positions are regarded as appropriate for inclusion in formal job evaluation programms.

Compensation Patterns in Community & Industry

Sales personnel compensation levels are related to

external supply & demand factors. - Management needs answers for these questions below: 1. What compensation system are used? 2. What is the average compensation for similar positions? 3. How the companies are doing with their plans? 4. What are pros&cons of desparity from industry or community pattern?

Determine Compensation Level

Average compensation to sales person is a must. Management should ascertain caliber of Sps &

compensation. Management should estimate sales worth in value and sales from Sps. Management to practice each cost estimates on a Real chart. Formal Job evaluation programmes. Unusual to find two cos operates under similar selling conditions but with different compensation levels. Sales managers are biased in favour of High compensation for selling jobs.

Various Compensation Elements

1.
2. 3. 4.

Four basic elements: Fixed compensation/salary -> Stability Variable/commisions/bonus etc ->Incentive exra income. Element of Fringe factor plus -> Paid vacation/insurance etc; Reimbursement of expenses -> Payment of expenses as allowances. Fixed element ratio : 60:40 Variable : 80:20

Types Of Compensation
1.

2.
3. 4.

5.
6. 7.

Straight salary plan Straight commission plan Determine commission base Drawing Accounts Combination of salary &incentive plan Use of Bonuses Fringe benefits

Straight Compensation plan

1. 2. 3. 4.

5.
6. 7. 8.

Simplest compensation plan Total payment in 7 days/15 days etc;( Industrial goods) Used commonly in trade selling ( Van sales personnel,liquor sales personnel) Economical to administer due to simple method. Accounting costs are lower Provides stable income & freedom from financial uncertainities. Weakness is monetary incentive is lacking. Management can easily measure good/average/bad performers.

Weakness Of SCPs
Little financial control over Sps activities.

Sps feel they are discharging their full responsibilty.

Careless in reports, leads,followups,shade prices

to make sales,use high pressure tactics,loss of customer good will. Sps will sell low margin items neglect to sell high margin items. Management need to spend a lot of time, effort money to keep up the spirit of Sps.

Determine Commission base

Select the base pay to commission.

Cos selling policies & problems strongly influence

selection of the base commission. If Sps made collection on sales then commission is based on collections. To control price cutting by Sps some companies fix commission on gross margins.

Reimbursement of sales expenses- policies &practices

Reimbursing sales expenses are Sps pay their own expenses& claim . 2. Reimburse part of their expenses ( Allowances are Fixed) 3. Cos reputation is involved in paying the reimbursement expenses on time. 4. The common guidelines reimbursement to Sps are as per position,grade,total t.o of business etc; 5. Expenses incurred are alawys away from H.Q on company business. 6. Expenses reimbursement should take living standards of Sps outside H.Q 7. Sps stay in different places and customers recogonise the place of stay.
1.

Methods Of controlling & Reimbursement

1. 2. 3. 4.

Flat expense account Flexible expense account Honor system Expense quota

a) Flat expense account: - A stipulated sum to cover allexpenses during a given period. - Less paper work /more freedom within stipulated limits. - Control of expenses by their Sps. - Plan call average economic tour circuits. - Flat expense requires skilled administration. - Mangement reviews plan of each in case of adequcacy/inadequacy.

Flexible Expense Account

Also known as Exact plan.

- Its salient feature is that sps are reimbursed all allowable expenses incurred &reported. Furnish expenses under each Heads.( travel by bus,train,food,laundry) etc; Also entertainment expenses are reported and reimbursed at certain levels. The flexibilty of expenses, sales opportunities are utilised. Mangement exercise limit of expenses,call average etc; Flexible account leads to unattractive administarive expenses time,clerical work etc; Dispute arises without monitoring and finally loose control.

Planning Sales Training Programmes

*Experts point out that training is considered one of the key elements in the development & implementation of mktg &sales strategies. *There are several types of training programms.Building sales training programms require five major decisions called A C M E E. 1. A- Aim 2. C- Content 3. M-Method 4. E- Execution 5. E- Evaluation

Objectives Of Sales Training Programmes

1.

2.
3. 4.

5.
6. 7.

8.

Lower Turnover Better control Control of employees Improve customer Relation Lower selling costs Higher premium for products New product launch Grooming to higher positions

A C M E E - Approach
Acmee approach or called as Kipling six honest

serving men They are six honest serving questions; why? What ? How ? Who? When ? Where ? A-ims C-ontents M-ethods Recycle/Redesign/Modify/Soforth E- xecution E- valuation

Programme Administration
Training Philosophy Organisation For Sales Training

Timing Of Programms

Location of Training

Instruction Manual &Training Aids

Philosophy Of Training Programmes

Conditioned Response Insight Response a) Conditioned Response; Philosophy to train sales personnel to respond in a standardised or programmed ways. ex; DetailMen in Pharma cos, News readers in T.V&Radio. b) Insight Response; Philosophy to train analytical skills to respond appropriately & individualised ways. ex; Singers classical or carnatic. The other factors regards sales force as a future talent with higher calibre for the management future needs.
a) b)

Organisation & Sales Training

Acmee requires four key organisational decisions. 1. Who will be the trainer? 2. Who will do the training? 3. When will it take Place ? 4. Where the training will be? Identifying the trainees are more complex in training programmes and yet another four followed in some organisations. 1. Reward for Good Performance. 2. Punishment for poor performance 3. Convenience of the trainee/trainer 4. Seniority

Contd.
Who will do the training? a) Initial training- A line function or Staff Function b) Continuing Sales Training: Responsibilty rests on top sales executive for the introduction of New Products,improving selling techniques, Revised sales policies. The top executives identifies need,design&excute the program. This is a continous responsibilty. c) Sales Training Staff: 1) Delegation of sales tarinee to sub-ordinates. 2) Top excutives delegates to Dsms RSMs ASMs. 3) Cos can have the fulltime or part time training. 4) Few large corporates have full time Training Manager in the organistions. 5) Corporates shall engage Proffessional Trainers to train the sales trainees.

Training The Sales Trainers or Training The Trainee

Corporates have training programm for sales trainers. The trainers should know the subject thoroughly. The trainers should know the a) Company b)Products

c)Policies d)Customers e)Problems f)Sales Persons Job g) Sales Techniques. Trainers use instructions guide,have specialised knowledge,effective teachers. Trainers should plan,organise effective teaching methods & presentation skills. The saying is If the trainee hasnt learned the training the trainer hasnt taught.

Contd.
*Outside Experts: Hiring the outside experts to conduct portions of sales training programme. Presentations of trainers in the companies. Fees are fixed on contract basis,programm basis, annual basis, perhead basis,hourly basis. No of trainers required per training programme.

When Will The Training Programm Takes Place?

Timing of group vs individual training - When new persons joining the training programm. - When the new persons need motivational training. 2. When a group of people joins the organisation. - Group training is the only source to develop employees. 3. Theoretical & Practical fundamentals of selling is taught in the training programm. 4. Individualised training is conducted in the field.
1.

5. Other methods are thro cds,phone,mail , virtual class rooms etc;

Timing Initial Sales Training Programm

Change or turnover of sales personnel.

Increasing in size of sales force.

Sales personnel product turnover is increasing Management plans for additional sales force.

Optimum no of trainers are effectively trained.

More no of people in tarining less efeectiveness.

Training Continous Sales Training Programms

Effective sales management believes tarining is a

continous process. Sales personnel are continously kept informed of new development. Management should assume sales personnel are eager to learn & improve selling techniques.\ Training programms are localised Decenteralised training Corporate training Group or personalised training

Instruction Material & Training Aids

Manuals. Training Aids. Printed materials/guides Advance Assignments a) Manuals: Work books,manuals used in group training. Best manual containing reading material Caselettes,problems,directions. Policies of cos & Procedures Study guides & references later.
1. 2. 3. 4.

Contd
Printed Materials;

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

 Motion picture or Film

Short Film Demo

In house video in camera sessions Role play & Feed back

Close circuit television

*Advance Assignments: Used for groups& individuals Trainees consume time outside formal sessions. To prepare for higher productivity.

Evaluation Of Sales Training Programmes

Performance against set standards

Tests & examination

Customer feed back on sps Analytical techniques & influence

Simulation of Trainers effectiveness

Evaluation of the Trainers sessions in a feed

- back format.

Controlling Sales Personnel Evaluating & Supervising

Controlling: 1) To understand meaning, steps &process control 2)To examine prerequisites& characteristics of control process. 3)Importance of control system. 4)Analyse methods of control. 5)Role of integrated control system. Henry fayols definition of control consists in verifying whether everything occurs by confirming with the plans adopted,the instructions received & principles established
a)

Contd
Efl Brech says control is checking performance against predetermined standards contained in the plans with a view to ensure adequate progress &satisfactory performance George R. Terry says controlling is determining what is being accomplished, that is evaluating the performance that takes place according to plans The four stepe are : 1) Establishing perforamnce standards. 2) Recording performances. 3) Evaluate performance against standards. 4) Taking action.

Standards Of Performance
a) Setting standards of performance requires consideration of the nature of the selling job. Sales job analysis is necessary to determine job objectives,duties &responsibilities &the like. b) Standards of performance facilitate the measuerment of progress made toward deparmental objectives. c) Specific objectives vary with change in the cos marketing situation,but reconcilable with general objectives of volume,profit &growth. d) The standards are used to guage the extent of achievment of general &related specific objectives.

Contd
Ex: Standards of achievment---Target of sales - volume,units,value.. Specific Objectives --------- No of calls made,type -classification etc; The quantitative standard that any firm should select is

one that permits comparison of sales volume performance with sales volume potential. Setting sales performance standards requires considerable market knowledge. Should know the total sales potential &the portion that each sales territory is capable of producing.

Quantitaive vs Qualitative performance Standards

QUANATIATIVE
Sales Person&Operating Period: 1. Sales Std or exceeded Quota. 2. New Accounts obtained 3. Sales to new accounts 4. Total no of calls&average calls perday . 5. No of times called on accounts. 6. Total contacts period/average 7. Proportion of calls 8. Total sales meeting held/attended 9. Customers entertained period/average per week.

QUALITATIVE
a)Job Factors: 1. Product Knowledge. 2. Awareness of customers 3. Relationship with customers 4. No of sales calls 5. Quota performance 6. Service follow-ups b)Personal factors Punctuality Dress&appearnce Diligence Co-operation Accuracy Adaptability Relaiability Strong points/weakpoints

Contd..
Quotas:

Quotas are quantitaive objectives to sales organistional units,individual sales personnel. Quotas are devices for directing & controlling sales operations. 1. To provide quantiative performance standards. 2. To provide higher sales & expense control. 3. To motivate desired performance. 4. To use in sales contests. 5. Quotas forecast sales/budget. 6. Types of Quotas ---- > Sales volume --- Budget -- Activity - Combination

Contd.
7. Procedures: a) Territorial quotas b) Total market estimates. c) Past sales experience d) Executive judgement e)Compensation plan f) Own sales volume quotas. g) Budget quotas ---- > Net profit -- Expenses

Contd.
Sales Expense Ratio: To be used to control the relation of selling expenses to sales volume. Are determined after analysis of expense conditions &sales volume potential in each territory. Shortcomings are doesn't take into account variations of different products profitability. The ratio is used more in industrial products than consumer products.

Territorial Net profit on Gross Margin Ratio

Def: Target ratios of net profit or gross margin to sales for each territory focus Sps attention on the needs of selling a balanced line and considering relative profitabilty . Mnagement emphazise more profitable products and devote more time &effort. Net profit controls sales volume &expenses as well as net profit Gross margin ratio controls sales volume and the relative profitabilty of the sales mixture and does not the expenses of obtaining & filing orders. The shortcomings are neglect solicitation of new accounts and overemphazise sales of high profit or high margin products and may indermine new products.Then the NPR may face computational problems.

Contd..
Territorial Maket share:

Def: This satndard controls market share on a territory by territory basis. Mnagement sets target % age of market share for each territory . It comapares company sales to industry sales in each territory and measures the effectiveness of Sps in obtaining market share. Sales coverage effectiveness index: Def: This standard controls the thoroughness with which a sales person works the assigned territory. The index consists of ratio of no of customers to the total prospects in a territory. Individual standards for sales coverage effectiveness are set up for each class and size of customers.

Contd
Call frequency ratio: A call frequency ratio is calculated

by providing the no of calls on a particular class of customers by the no of customers in that class. Ex: A class----------- > 1o customers / 2 times in 15 days. B class ---------- 20 customers 1 time in 30 days. C class --------- 60 customers 1 time in 30 days. Calls Per Day: 1. Set a standard for number of calls to be made per day. 2. Plan routes ,appointments befor making a call. 3. Standard for calls per day are set individually for different territories.

Contd..
1. 2. 1. 2. 3. 1. 2. 3.

Order call Ratio: This ratio average the effectiveness of Sps in securing orders. Its also called as Batting Average.It is calculated by dividing the no of orders secured by the no of calls made perday. Order call ratio standards are set for each class of account like A,B,C. Average Cost Per Call: To emphasize the imporatnce of making profitable calls. A target for average cost per call is set. Target average cost per call standards are also used to reduce the call frequency on accounts responsible for small orders. Average Order Size: Average order size standards control the frequency calls on different accounts. The practice is set different standards to different sizes and class of customers. This objective may require Sps to reduce the frequency of calls on some accounts.

Contd
Non Selling Activities:

Some organisations establish performance stanadard for non selling activities. 1. Dealer Displays. 2. Co-operative Advertising contracts. 3. Training distributor personnel. 4. Good will calls on distributors. Multiple Quantitative Performance: Sales personnel can be assigned nine different quantitative standards per operating period.

The Sales Budget

A blue print for making profitable sales . It is defined as a sales budget consists of estimates of operating periods probable dollar and unit sales and the likely selling expenses. Purpose of Sales Budget: 1. Mechanism of control 2. Instrument of planning 3. Budget form and content 4. Estimation of budgeted selling expenses 5. Budgetary procedure. 6. Planning styles /stages &budgetary procedure 7. Actual budgetary procedure. 8. Handling competition with the budget. 9. Selling the sales budget to Top Management. 10. Selling the sales budget to Top Management. 11. Budget & Control. 12. Flexibility.

Budgetary Procedure
Company budgetary procedure normally begins with the sales

department. The prediction flows of sales revenues directly impacts other departments. Once top management gives tentative approval to the sales budget other departments prepare budget outlining their plans. Production deptmnt takes its cue from the sales budget inpreparing manufacturing expense&inventory. Financial department use the sales budget to prepare budget for capital expenditures,earnings cash position&administrative expenses. Production deptmnt--------------Unit sales Financial deptmnt---------------- > Sales revenue

Sales Territories
Sales territories facilitates making selling efforts with sales opportunities. Reasons for establishing Sales Territories: Market coverage Controlling sales expenses Assisting Sps Contribution to SFs morale Co-ordination of personal selling &Advertising. Routing, scheduling&controlling. To increase market share& margins To attain a position in market place.

Sales Control &Cost Analysis

Sales Audit:

A systematic,critical&unbiased review of the policies of selling functions of the organisation. To examine Six Main Aspects: 1. Objectives 2. Policies 3. Organisation 4. Methods 5. Procedures 6. Personnel