MODULE 5 MARKETING APPLICATIONS

31.1 SALES MANAGEMENT

Tasks Involved in Sales Management
It is sales management that translates the marketing plan into
marketing performance. Thats why sales management is known as the
muscle behind marketing. Sales managers in modern firms are required
to be customer-oriented & profit-directed & perform several tasks
besides setting & achieving personal selling goals of the firm.
Determining & achieving the firms personal selling objectives
Formulating sales policies
Structuring sales force
Deciding the size of sales force
Designing sales territories
Developing sales forecasts & sales budgets
Fixing sales quotas/targets for individual sales territories/men
Creating sales force
Selection, Recruitment & Induction/Orientation
Managing the sales force
Compensation, Motivation, Moral Building
Sales coaching/Supervision, Evaluation/Appraisal, Training/Dvpt
Managing the marketing channels
Ensuring growth & developing new accounts
Sales communication, reporting & coordination
Sales control including sales expenses
Building the sales organization
Assisting marketing in optimizing 4 Ps
Creating & maintaining right image for the firm
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31.2 SALES MANAGEMENT
Areas Where Personal Selling Objectives have to be Set:

Sales volume/growth
Share of each product in the total sales volume
Market share/profits
Selling expenses
Key/New accounts
Expansion of channel Addition/Deletion
Proportion of cash/credit sales
Monitoring sales outstanding/age
Pre/Post sales service
Training of dealers/customers
Assistance in sales promotion measures
Supplying market intelligence

Areas Where Sales Policies have to be Set:

Product

Which products should find a place in the product line

Whether some of the existing products are to be dropped
Whether product design/quality needs to be changed
What models/types/sizes/colors/packing need to be changed
How product service is to be provided
What kind of product guarantees are to be given

Distribution

Channel design/types
Channel remuneration/motivation/training
Channel-Principal relations
Channel costs

Pricing

Whether prices should match competition

Pricing method to be followed
Discounts/rebates to be given
Terms of delivery /payment
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31.3 SALES MANAGEMENT
Advantages of Sales Territories
Helps the firm achieve better market coverage & service the market
effectively, economically & profitably
Helps bring sales efforts in alignment with sales opportunities
Helps improve the performance of salesmen
Helps reduce lost sales
Helps optimum sales calls on all classes of customers in the entire
marketing area & thus helps eliminate wastage
Helps reduce sales expenses
Helps give individual attention to major customers
Helps gain advantages of segmentation as the territory is a more homogenous
unit than the market as a whole; characteristics of customers can vary from one
sales territory to another
Makes market data more meaningful as it is collected & applied at the territory
level, which is a more homogenous area
Facilitates effective planning/implementation/control of sales tasks

Helps control of selling expenses; breaking down the market into

smaller units facilitates this
Helps assigning responsibility for achieving specific objectives to
sales executives & salesmen
Helps fix sales quotas, activity quotas & targets properly
Aligns selling efforts with sales opportunities
Helps proper evaluation of sales personnel; helps gather information
on individual performances with sales opportunities present in the
territory, thereby providing a proper base for appraisal
Helps fix standards of performance more meaningfully
Contributes to the morale of the sales force
Helps better coordination of personal selling & advertising efforts
Helps improve customer relations
By establishing sales territories, the firm also accumulates knowledge
on its strengths & weaknesses in serving different markets. It can use
this knowledge to improve its competitive position
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31.4 SALES FORCE COMPENSATION
Straight-Salary & Straight-commission Plans: Merits/Demerits
Straight Salary -- Merits
Simple to design & easy to administer
Provides a sense of security & a basal motivation to salesmen
Helps the firm to control salesmen better
Ensure salesmen sell all products, not those giving better commission
Ensure salesmen attend to long-term marketing objective of the firm
Helps avoid unhealthy rivalry/jealousy among salesmen
Is particularly useful when the firm follows pull strategy

Straight Salary Demerits

Does not offer incentive for salesmen to increase sales
Salary is a fixed cost, unrelated to sales volume or margin; the firm
has to increase it irrespective of results/profits

Straight Commission Plan Merits

Provides incentive to perform better as it rewards the salesmen
according to their performance
Commission is a variable cost, related to the sales volume or the
margins/profits brought in by the salesmen
Is particularly useful when the firm follows push strategy

Straight Commission Plan Demerits

Difficult to design & administer; sometimes commission plans can become too
complex, involving formulae, frustrating the salesmen
May not be of much use when the salesmen are absolutely new
Is difficult to control straight-commission people, as they are freelancers; it is
especially difficult to make them perform tasks for which no commission is paid,
e.g. they may not care to provide the firm the needed market intelligence
Difficult sales territories may suffer under such a plan
May lead to unhealthy rivalry/jealousy among salesmen
If the product is highly seasonal, the income of the salesmen will be highly tilted,
month-to-month & between off-season & season
Similarly, if the market becomes unduly depressed due to some reason, the
income of the salesmen would go down drastically
May result in excessive pushing of products without caring for the value
satisfaction to the customers

MODULE 5 MARKETING APPLICATIONS

31.5 MIS
Marketing Information benefits a Firm in many Ways
In Marketing Planning
Helps by making available relevant insights on the external
environment as well as internal realities of the firm
Helps tap opportunities & build defenses against threats
Helps quick spotting of changing trends
Provides valuable market intelligence

In Marketing Implementation

Helps implement all marketing action programs

Helps deliver customer-oriented marketing offers/4Ps
Helps in adjusting products/services to the needs/tastes of customers
Helps product innovations; product innovations are the result of the
firms knowledge of unserved market needs; marketing information
confers this knowledge
Helps reduce product failures
Supports channel management/choice/motivation/multi marketing
Supports promotion; helps planning of promotion; leads to better
campaigns, better selection of target audience, better choice of media
Helps build relations with customers. After all, customer relations
rest on customer knowledge. And, marketing information confers
this knowledge. It is by using such information intelligently that
organisations build best relations with customers

In Marketing Control
o Imparts quality to all marketing decisions; the quality of these
decisions is actually determined by the quality of marketing
information available to the decision maker. And such quality
decisions are the essence of effective market control
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31.6 MIS
Advantages in having a System for marketing Information
A system framework provides a set of procedures & methods for regular,
planned, purposeful & systematic gathering of data, its analysis, storage &
retrieval.
Helps improve the data capture process, checking for reliability, consistency &
quality of the data.
Smoothens the operation in gathering, processing & transmitting the data;
facilitates communicating information to managers in a decision ready form

Tailors information outputs to suit needs of the concerned executives.

Helps using same information several times & for different purposes;
helps create formats that automatically allow repeat & multiple-use.
Helps sort out conflicting information, which if left unattended will
misdirect the effort of the decision makers.
Integration of information is perhaps the most important benefit of a system
framework. System helps instant access to company-wide data & cross sharing
of information cross-function & cross-location information and thereby helps
the firm serve the customer better, save costs & score over competition.
Converts information into insights. Creates customer insights out of routine
transactional data. This, in turn, helps create & deliver customer-oriented
marketing offers, helps customer retention & building of best customer
relations. Put differently, an MIS helps offer superior value to customers by
using routine transactional data.
Serves as a total knowledge-management mechanism. Converts data into
information & information into knowledge; supports capture of knowledge; also
serves as a mechanism for managing it; makes the knowledge flow where it is
required; and ensures that it is available in a readily usable form.

Steps involved in Designing & Developing an MIS

Defining information needs/Identifying the source of information

Classification of information
Evaluating cost of collection of information against the benefits
Designing mechanism of collection/analysis/storage of information
Deciding the frequency & timing of collection/supply of information
Processing/analyzing/interpreting the information
Monitoring, maintaining, reviewing & improving the system
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31.7 MIS
Open-end & Close-end Questions: How They Differ & How They are Used

Close-end Questions

Open-end Questions

Permit respondents to answer in their own words

Provide insights as they do not limit respondents

answers
Particularly useful in probing & can offer insights
into how people think rather than how many people
vote for a particular attribute
Word association is commonly used in eliciting
responses. The interviewer presents a word & the
respondent mentions the word that comes to his
mind as the association
Sentence completion is also used. Here, the
interviewer presents an incomplete sentence & the
respondent completes the sentence, e.g. I chose
Cadburys Dairy Milk Chocolate because

Foreclose all the possible

answers; respondents have to
choose an answer within this
framework
Lead to answers that are
easier for interpretation &
tabulation
Questions eliciting Yes-or-No
answer is one example
Questions with multiple
choice answers, is another

Questions that elicit the

degree of
agreement/disagreement of
the respondents to the
statement, is third example
At times, a completely unstructured question is also Questions that ask
used. This is a question that respondents can
respondents to rank a
answer in an unlimited # of ways, e.g. What do you product, say, on a 5-point
think of the Kaun Banega Crorepathi program?
scale, is a fourth example
Steps Involved in a Market Survey
Planning the Survey
Problem definition, Selection of the survey method
Sampling, Questionnaire development, Pilot survey
Field work
Selection/Training of investigators, Interviewing/Collection of data
Supervision/overseeing the fieldwork
Processing
Processing of data (EDP/Manual), Tabulating
Analysis & Interpretation
Editing & Interpreting data, Statistical analysis & interpretation
Report making
Summarizing findings & recommendations, Report writing