MODULE- 1

Sales - Meaning
The exchange of goods or services for an amount of money or its
equivalent in kind

Introduction to Sales Management 2

Evolution of Sales Concept
First generation (Exchange of goods)
Second generation (Store concept)
Third generation (Search of the customer started)
Fourth generation (First step to systematic selling)
Fifth generation (Need based selling)
Sixth generation (Started in 1960)
Seventh generation (Customer satisfaction came into picture)

Introduction to Sales Management 3

Selling - Nature and Role
Helps organization to achieve its goals
Enhances knowledge about both internal as well as external
environment
Information exchange among the departments
Identification of potential prospects, qualify them and develop a long-
term relationship with such customers

Introduction to Sales Management 4

Selling - Image
Sales makes a vital contribution to society and the economy, its
negative image tends to overshadow the good it does
The profession of selling is one of the most degraded, condemned, and
ridiculed professions in the society

Introduction to Sales Management 5

Sales Management - Objectives
Increase sales volume
Contribute to profit
Long-term growth of organization
Improving the contribution to profit
Attaining the long term growth in market

Introduction to Sales Management 6

Integrating Sales and Marketing Management

No tandem between sales and marketing functions in an organization

A marketing person may perceive the sales job as
One with no scope of creativity
Sales people do not understand the behavior of customers rightly
A sales person may perceive the marketing job as
Inferior because sales people make the marketing program successful
Being alienated from the actual market
A negligible communication between these two organization

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Role of Sales Manager
As a sales forecaster
As a strategic planner
As an observer of buyer behavior
A market analyst
A leader
A cost and profit analyst
A budget manager
A communicator

Sales Functions & Policies 8

Responsibilities of Sales Manager
Hiring (recruiting sales force)
Training (Providing necessary sales training)
Coaching ( observing the training needs of sales person)
Motivating (continuous support)
Setting targets and tracking results
Recognizing and rewarding performance
Providing leads and sales support
Organizing the sales efforts
Conducting sales meetings
Allocating scares resources
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Roles of Sales Executives
As a persuader
A service provider
An information-gatherer and reporter
An advocate
A traveler
A coordinator and scheduler
A problem definer
A customer ego builder
Arranging display for wholesaler and retailer
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Responsibilities of Sales Executive
Identify potential customers from current data base
Identifying prospective accounts and deciding upon the priority and
frequency of making calls
Deciding upon the selling approach
Administering the sales order
Service provider
Information gathering and reporting
Skill up gradation
Administrative responsibilities
Sales Functions & Policies 11
Policies that Impact Sales Management
Sales-related policies pertaining to the product
Product line policy
Product design policy
Sales-related policies pertaining to the distribution
Sales-related policies pertaining to the pricing

Sales Functions & Policies 12

Environmental Changes affecting Sales Management

Shorter product life cycle

Longer, more complex sales cycle
Reduced customer loyalty
Intense competition among manufacturing companies
Rising customer expectation
Increasing buyer expertise
Electronic revolution in communication

Introduction to Sales Management 13

Entry of Women in Sales Management
Nowadays companies are hiring women too as a sales personnel in
selling products and services to both types of individual as well as
industrial customers

Introduction to Sales Management 14

THEORIES OF
SELLING
Selling is considered as an art by some and a
science by others.

This has produced two contrasting

approaches to the theory of selling.
 Buyer Seller Dyads
buyer seller interactions is said as buyer seller dyads.
Marketing implications of buyer
seller dyads
Sales personnel should be matched with the customer so as to increase
interaction. Do not hire a sales executive in one demography to
represent the company in another demography altogether.
A factor majorly affecting buyer seller dyads is the impression brought on
from childhood that sales and marketing involves tricking the customer
into buying theproduct. This too affects the interaction process
Sales personsare stereotyped even before their pitch. Thus they need to
be trained in such a manner that they overcome the resistance so as to
have a positive interaction.
Selling is a two way process involving both the consumer and the
marketer, a buyer and a seller. Hence the study of buyer seller dyads is
extremely important.
Four Theories of Selling
AIDAS

Right set of circumstances

Buying Formula

Behavioral Equation
 AIDAS and Right Set Of Circumstances
are seller oriented theories.

Buying Formula theory of selling is Buyer

oriented.

The Behavioral Equation theory

emphasizes the buyers decision process
but also takes the salespersons influence
process into account.
AIDAS theory of selling
A-Securing attention.

I-Gaining Interest.

D-Kindling desire.

A-Inducing Action.

S-Building Satisfaction.
Right Set of Circumstances
Theory can be summarized as Every thing was right.

This theory is also known as Situation-response

theory.

A sales person needs to be well skilled to handle the set

of circumstances.
BYUING FOMULA
THEORY OF
SELLING
The name buying formula has
been given by the late E.K. Strong.
It is a step-by-step explanation of the
buyers needs.
Reduced to its simplest form, the
mental processes involved in a
purchase are

need solution purchase

 After adding the fourth element,
it becomes

Need(or problem) solution purchase

satisfaction
After modification in the solution and
satisfaction, the buying formula becomes

need product and/or service and trade

name purchase
satisfaction/dissatisfaction
 After adding adequacy and
pleasant feelings, it becomes
adequacy pleasant
feelings

need product and/or service and trade

name purchase
satisfaction/dissatisfaction
Behavioral
Equation Theory
 Using a stimulus response model and
incorporating findings from behavioral
research, J.A. Howard explains buying
behavior in terms of the purchasing
decision process, viewed as phases of the
learning process.
Four essential elements of the learning
process included in the stimulus-response
model are:
1. DRIVES:
a) INNATE DRIVES
b) LEARNED DRIVES
2. CUES:
a) PRODUCT CUES
b) INFORMATIONAL CUES

3. RESPONSE

4. REINFORCEMENT
Howard incorporates
these four elements into
an equation

B =P * D * k * V
Where
B= response or internal response tendency
P= predisposition or the inward response
tendency
K= incentive potential
V= intensity of all the cues
Analyzing Market Potential
Ability to Buy
Willingness to Buy

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Sources of Data
Primary data sources
Secondary data sources

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Sales Forecasting Method
Qualitative Methods
User Expectations
Sales Force Composite
Jury of Executive Opinion
Delphi Technique
Market Test

Sales Planning 33
Sales Forecasting Method
Quantitative Methods
Time Series Analysis
Moving Average
Exponential Smoothing
Regression and Correlation Analysis
Multiple Regression Model

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Selecting a Forecasting Method
Accuracy
Cost

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Types of Data Available
Requirements of the Software
Experience of the Company

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Criteria for Effective Forecasting
Accuracy
Plausibility
Durability
Flexibility
Availability of Statistical Indexes
Organizational Participation
Demand patterns in the Market for the Product

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Difficulties Associated with Forecasting
Lack of Adequate Sales History
Lack of Time, Money and Qualified Personnel
Changing Customer Attitude
Fashions and Fads

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Planning - Meaning
Planning is the process that guides the organization from where it is
today to where it wants to be tomorrow

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Sales Planning - Importance
Better implementation of corporate plans
Provide a sense of direction
Focus on realistic objectives
Improve coordination
Facilitate control
Ensure healthy interpersonal relationships
Reduce uncertainty and risks

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Sales Manager as Planner and Administrator

Sales manager as planner

Sales forecasting
Developing objectives
Developing the sales organization
Formulating policies and procedures
Preparing the budget
Sales manager as administrators
Supervision
Delegation
Coordination
Motivation
Ethical approach

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Sales Planning Process
Setting objectives

Determining operations

Organizing action

Implementation

Measuring results against standards

Re-evaluating
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Sales Planning Process
Setting objectives
Internal situational analysis
External situational analysis
Determining operations to meet objectives
Organizing for action
Implementing
Developing strategies
Coaching
Measuring results against standards
Reevaluating and control
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Causes of Unsuccessful Sales Planning
Lack of awareness or understanding of important aspect
Absence of proper planning
Lack of systematic communication
Absence of sales force involvement

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Accuracy of Sales Planning
Sub-sets of sales planning
Forecasting
Budgeting
Territory Management
Accuracy depends on Plans time-frame
Accuracy can be gauged from the difference between forecasts and actual results
Short-term plans are more accurate than long-term plans
Factors affecting accuracy
Growth rate of profits
Organizational size
Involvement of top management
The planning process
Sales force participation in the planning process
Communication of the planning elements
Formulation of specific objectives

Sales Planning 45