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Lecture 1 - Intro To Sales Management
Lecture 1 - Intro To Sales Management
Ch-1
Chapter
1-1
(2nd Edition)
S L Gupta
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Ch-1
Introduction
Sales management is defined as the planning, direction and control of personal selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to the personal sales force. Definition Committee of the American Marketing Association. Sales force is responsible for the sale of products of a company and to add profit to the business operations and fulfill social obligations. Sales force should be hardworking, result oriented, well educated and competent to handle changing
situations. Technical developments which are taking place at a rapid speed have
made the task of sales force more challenging.
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The sales team continuously monitor the customer preference, competitors situation, government policy and other regulatory bodies.
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Relationship-based selling Relationship-based selling works because people would rather buy what they
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4. 5.
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7.
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3.
4. 5.
Advising the company on various media, sales promotion schemes, etc. Monitoring the companys sales policies.
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In the table that follows, Al Reid gives the steps necessary for getting success in selling:
Territory Sales Managers Job Responsibilities
To yourself
Increase basic selling skills. Develop management abilities. Keep pace with changes, trends and developments in your territory.
To your company
Be proud of your association with your company. Maintain the company standing and standards with all customers. Inform the headquarters and your supervisors, through established channels, about changes and developments in your territory. Be prompt in handling records, reports, correspondence, etc.
To your customers
Work closely with decisiontakers and influencers in each account. Point out the advantages of an association with your company. Keep accounts current and upto-date on all company advertising and promotional activities. Suggest ideas, methods, techniques and tips that can stimulate sales.
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Grow, so that you can assume greater responsibilities as opportunities permit. Maintain the appearance and goodwill expected of a territory sales manager. Analyse your weak and strong points and then think about them.
Cut selling costs by economical routing, good use of time, planning and greater awareness of opportunity. Check demand and movement of products in the territory. Report activities of the competitors. Strive to reach the best goals. Ask for help, when you need it. Cooperate with other departments of the company.
Inform the customers about the trends in their areas. Handle complaints effectively and to the complete satisfaction of the complainants. Suggest the best technique for selling your products to the customers. Organise presentations to inform and save time. Make the customers aware of the changes in the companys policies or procedures. Stimulate and maintain enthusiasm for your products. Build and maintain goodwill.
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Changing or fixing prices Credit facilities to old and existing customers Assurance regarding quality and after-sale service Payment terms and settlement of claims.
Text & Cases Cont . Copyright 2010, S L Gupta
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Target-setting Sales targets are fixed on the basis of past experience, time period and
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Determining the size of the sales force Decision regarding type and quality of sales force required Designing the sales organisation Territory designing Recruitment and training procedures Task allocation Compensation of sales force Performance appraisal and control system Feedback mechanism to be adopted Managing channel relationships Coordination with marketing departments.
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N
E R
In this model, a customer is treated as a partner. Therefore, maintaining a good relationship with the customer is important.
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In this strategy, both the customer and the salesperson come out of the sale
with a sense of satisfaction. The salesperson not only obtains the order but sets the stage for a long-term relationship, repeat business and future referrals.
They both come out of the sale feeling satisfied, knowing that neither has taken advantage of the other and that both have profited, personally and professionally, from the transaction.
However, some salespeople have still not accepted the merits of the win-win
approach. They have adopted a win-lose approach which means that the salesperson wins at the buyers expense.
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Win Lose approach vs. Win Win attitude The starting point to the development of a double-win philosophy is to compare the behaviour of persons who have adopted the win-lose approach with that of persons who have adopted the win-win approach (Figure).
Double-Win Strategy Win - Lose People See a problem Fix the blame Let life happen to them Live in the past Make promises they never keep Win - Win People Help others solve their problem Fix what caused the problem Make life a joyous happening for others and themselves Learn from the past, live in the and set goals for the future present
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Instant Service
It is in this context of providing almost instant service to the customer that the concept of supply chain management has caught the imagination of managements the world over.
No matter how efficiently and effectively goods/services are produced, if they cannot be delivered to the customer in the quickest possible time, all efforts made earlier are in vain, particularly in the context of very short product life cycle counted in months rather than years. As depicted in Figure below, a combination of effective process plus supply chain management is what is required to cope with the challenges of the international market-place.
One cannot survive in a highly competitive market without conforming to the so called Q-C-D triangle Highest Quality, Lowest Cost and Least Delivery times. Cont
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Customer Delight
On time delivery
Competitive price Reliability of product or service Novelty/uniqueness of product/service
PROCESS management
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Hard Sell Concern for self Canned presentation Talking Pushing product Presenting features Advocating without acknowledging
Soft Sell Concern for customer Questions for discussion Listening Providing buying opportunities Presenting benefits Acknowledging needs
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4.
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Selling Process
The selling process is defined as a process by which a salesperson identifies and locates the prospects, separates the prospects from the suspects approaches them and makes a sales presentation, handles their objections. He also follows up the existing customers to identify further sales leads and measures the success and customer satisfaction level of the current products and service offerings. Selling concept refers to the exchange of goods or services for an amount of money or its equivalent in kind. Selling helps an organization achieve its organizational goals. Thus, managing sales in an organization is a critical activity. A sales manager needs to ensure that the salesman are motivated to give their best performance. The sales team continuously look out the changes taking place in the external environment regarding competitors, customers, government policy and other regulatory agencies, advances in technology, and industry trends. This provides the sales personnel a vital information regarding trends in product sales, product development, and budgets. Copyright 2010, S L Gupta Cont
. Text & Cases
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The economic slowdown is receding and budgets of companies are increasingly receptive to alternative direct marketing tools to sell their products. Telemarketing (TM), that is marketing products and services on the telephone, a direct marketing tool, which has touched a high in the last three years. Apart from professional TM service outfits, many companies, including MNCs, have set up their in-house TM cells.
A TM outfit works through a well networked team of trained telemarketers who make calls to potential clients and customers and establish direct contact with them. The key lies in convincing the customer about the value of the product or service and fixing up an appointment. Direct customer marketing system allows customers complete flexibility to purchase our products. Orders can be placed via the Internet, over the phone, by mail, through our catalogue or through the company personnel.
Cont . Copyright 2010, S L Gupta Text & Cases
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Mail Order Sales Mail order houses are retail trading organisations engaged in the mail order business. This is also known as carrying on business through post or mail. In this method, customers do not visit the sellers business premises, nor do they make a personal examination of the goods before they are purchased. In this system, orders are received from customers by post and the goods are dispatched usually by VPP (Value Payable Parcel) or registered post.
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In case of the mail order business, the selling function is performed without the intervention of the personal salesman.
The goods should be known for their utility so that there is no need of
convincing prospective buyers about their usefulness.
They must fetch a sufficient price to have a wide profit margin. They must command wide demand. They must not be easily perishable. They should be available in large quantities throughout the year.
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Sales through Large Scale Fixed Shop Retailers Concentration of population in urban areas, increasing flow of manufactured goods and improved methods of organising business have led to the expansion of retail business. This expansion was effected in different ways, giving rise to different types of retail establishments, which operate on a large scale. More prominent among them are the following: Departmental stores Chain stores
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Sales through Wholesalers and Retailers Wholesalers perform a number of functions in the marketing of goods as
listed below
Assembling and buying Storing or warehousing
Transporting
Financing Risk-bearing
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In the process of acting as a link between the wholesaler and the consumer, a retailer performs many functions. The more important of them are given below: Buying and assembling Warehousing or storing Selling Grading and packing Financing Supply of market information Advertising.
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Direct Selling
Lessons From Direct Selling THE STRATEGY: Eureka Forbes structures its demos according to the time at the customers disposal. The Lesson: Keep the process flexible enough to accommodate individual needs.
Cont . Copyright 2010, S L Gupta Text & Cases
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Yes
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THE STRATEGY: Modi Telstra uses a clearly structured sales call process to market its cell phone services.
THE LESSON: Simplify the process of negotiation to save the customers time.
THE STRATEGY: Oriflame uses multilevel marketing to enlist direct sales agents from its customer base.
THE LESSON: Use your customer to sell your product to other customers.
THE STRATEGY: INDAL empowers its sales force to take pricing decisions on the spot when closing sales.
THE LESSON: Ensure that your direct seller can conclude a deal immediately.
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2.
3. 4. 5.
6.
7. 8. 9.
Design sales territories, set sales quotas and define performance standards
Compensate, motivate and lead the sales force Conduct sales volume, cost and profit analysis Evaluate sales force performance
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10. Monitor the ethical and social conduct of the sales force.
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Text & Cases
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Sales Manager
BM BM
BM BM
BM BM
BM BM
BM BM
BM BM
BM BM
BM BM
BM BM
BM BM
Field Staff
Field Staff
Field Staff
Field Staff
Field Staff
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2.
Non-Financial
Financial includes compensation, salary, incentives and fringe benefits. Non-financial includes motivation and its implications to sales management.
But monetary compensation is one of the most direct and least ambiguous ways
of communicating to sales people about their performance.
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Methods of Remuneration
The sales force can be remunerated in the following ways: 1. A straight salary
2.
3. 4.
5.
Salary and different rate of commission on varying totals or for different types
of goods
6.
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Expenses Accounts
The major sales expenses accounts are categorized as follows: 1. 2. 3. 4. Salary accounts Commission accounts Bonuses Meals and entertainment
5.
6. 7. 8. 9.
Air travel
Automobiles rentals Lodging Travel accounts Tour expenses accounts (Advance accounts)
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Fringe Benefits
Types of fringe benefits are: 1. 2. 3. Company Car Supplemental life insurance and medical insurance Tax-return preparation
4.
5. 6. 7. 8. 9.
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Laundry benefits, while on the tour Special perquisites for outstanding performance by getting travel prizes
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