SALES MANAGEMENT: Meaning, Nature & Scope

Meaning
Sales management means performing selling activities and managing the sales force. It include-recruitment, selecting, training, motivation, compensation, controlling the sales force; setting sales budget, sales quotas, sales territories and organising the whole sales efforts.

Definition
Sales management includes recruitment , selection, training, motivation, supervision on the work, and evaluation of performance of sales force. -Rachman and Romane

Characteristics
It is a part of business management. It includes sales force mgt It also includes fixing sales-quota and sales territories. The scope of sales-mgt is increasing rapidly. It is responsible for personal-selling activities and effective salesmanship. It is continuous process.

Difference between Marketing & Sales Mgt

Scope Evolution Activities Producer/consumer oriented Approach to profit Control Earning profits

Objectives
To increase the sales To contribute to profit maximisation To contribute to continuous growth of enterprise

Functions
Policy formulation Determining sales objectives Determining the size of sales force Selecting suitable organisational structure Framing sales budget Fixing sales quota Designing sales territories

Management of sales force

Recruitment of sales force. Selection of sales force. Training of sales force Assigning sales activities Equipping sales force Directing sales force Compensating sales force Motivating sales force Evaluating and controlling the performance of sales force.

Other Function
Gaining knowledge about economic and market conditions of sales-territories Studying customers likings, disliking, taste, preference, complaints and suggestions of customers. Collecting amount Studying competitors strategies Performing accounting function.

Personal Selling

Introduction
Personal selling is one the elements of promotion mix of marketing along with advertising, sales, promotion and publicity. Personal selling consists of contacting prospective buyers of product personally - Richard Buskrik

Features of personal selling

It is face to face comm. It is the ability to persuade the prospective buyer. It is the ability to change human desires into needs or wants. It consists of winning the buyers confidence for sellers goods. It establishes sound and lasting relation It allows immediate feedback It is universal.

Features of personal selling

It is two way process. It is persuasion and not compulsion. It is highly useful for selling technical products. It discourages bargaining. It helps in giving effective presentation & demonstration.

Importance of personal selling

Immediate feedback Flexible Demonstration Most suitable for technical products. Minimum wastage of selling efforts Clarification of doubts Performs entire selling job More customer satisfaction

Importance of personal selling

Increases knowledge of customers Helpful in facing competition Collects market information Increases employment Very suitable for market of services Promotes new products

Limitations of personal selling

Very costly Turnover of sales forces Inefficient sales force Not much useful for consumer goods Time consuming Busyness of customers Wrong tactics adopted by sales force

Process of personal selling

Pre-sale preparation Prospecting for personal customer Pre-approaching Approaching Presentation and demonstration Handling objections Closing the sale Follow up

Difference b/w advertising & Personal Selling

Meaning Form Personal Contact Suitability for product Adjustment of message Immediate feedback Actual Sale Target Group Clarifying of doubts

SALES QUOTA

MEANING
A sales quota is the sales goal set for a product, geographical area or sales representative. It is primarily a managerial device for defining and stimulating sales efforts.

DEFINITION
A sales quota is a sales performance goal. It is assigned to a marketing unit, a sales person, a branch, or a middleman.
Stanton and Buskrik

FEATURES
Specific time period Various types Serve as the standards Motivational tool Can be set for different products, salesmen or for different sales territories Require study of market conditions

FEATURES
Require sales forecasting Statistical & non- statistical techniques Helps in controlling & directing Depends on accuracy of data

OBJECTIVES
To set standards for performance evaluation of sales force To control selling expenses To motivate sales force To develop effective compensation plans To identify the market areas where extra promotional efforts are required

Other Objectives;
Achieve higher sales Can identify the salesman who need training Person can be held responsible Ensures systematic physical distribution

SALESMAN S QUOTA

DIVISONAL QUOTA

TYPES

DEALERS QUOTA

BRANCH QUOTA

Can be in the following forms:

Sales Volume Quota
Rupee Sales quota Units sales quota Points sales volume quota

Selling Expenses Quota Gross Margin Quota Sales Activity Quota Combination Quota

FACTORS

Past Sales Sales Potential Level of Competition Sales Policy Size of Ad Budget Government Policy

 Demand Tend for The Industry Standard of Living of Consumers Price Policy New or Well Established Business Unit Political & Social Conditions

METHODS FOR SETTING SALES QUOTA

Sales potential of individual units Sales potential of total market Last years sales Judgement of high officials Sales force own estimates

ESSENTIALS:
Fair & Attainable Simple & understandable Uniformity Participation of sales force in quota setting Timely follow-up Motivational effect Stability in method of setting quota

LIMITATIONS
Difficult to estimate sales Under-Utilization of capacity of efficient salesman Personal bias Risk of increase in bad debts High levels of quotas result in ineffectiveness

Short supply of product Economic burden Frustration among less efficient sales force Areas other than sales are ignored Incentive to unnecessary purchase thus affecting sales of near future period

Selling Theories
AIDAS Buyers Problem Product oriented Behavioural (buying=present drive*present motivation*incentive potential*reinforcement) Situation response