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Sales and Distribution (Mba MK 03) Unit 1
Sales and Distribution (Mba MK 03) Unit 1
UNIT 1
LEC.1
Sales management originally reffered exclusively to the direction of the sales force personnel.
Sales management meant management of all marketing activities , including advertising , sales
promotion , marketing research , physical distribution, pricing and product merchandising.
According to the committee of the American Marketing Association, “the sales management
meant , 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 salesforce.” Sales Management is a respectable function today, and its professional
status is high as any other business function.
Sales management provide critical inputs for the key marketing decisions like budgeting ,
quotas and territory management.
From the company viewpoint , there are three general objectives of sales
management :
Sales volume
Contribution to profit
Continuing growth
B. Reports:
i)daily report
ii)weekly report
iii)tour programme
D. Sales Training:
i) Presentation techniques
ii) Techniques to prompt and handle participation
iii) The methodology of role-playing, which can be valuable assistance in
developing sales skills.
iv) The use of training films.
E. Presentational techniques:
This section is designed to highlight key factors which can be used to make
your presentation more effective.
A sales manager jobs has two dimensions ----- planning & operating
LEC. 3
Personal selling is a part of the total promotional activity of the firm, which along with product,
price, and place management, goes a long way in meeting the overall marketing objectives of
the organization. The ultimate objective of the marketing function is to increase the sales of
want-satisfying products and services, thus leading to a healthy bottom line. Of the several
tools available to stimulate sales, one more important tool is personal selling.
Sales management , is the direction of the personal selling effort . Mostly, this is accomplished
through salesmanship . A salesperson’s job has many activities , including salesmanship. A sales
manager has to understand these.
A sales person faces many problems, some of which are related to salesmanship. A
salesmanager must understand these and provide the right solutions.
Salesmanship is defined by Shapiro as the art of persuation which motivation the customers to
buy products which provide them suitable benefits. Salesmanship is initiated by the seller and
provides information to the prospective buyers about the products and their benefits so as to
persuade and motivate them to opt for them.
LEC. 4
Handling Objections
Closing
LEC. 5
1. Personality
2. Mental qualities
3. Sociability
4. Vocational skills
5. Communication ability
6. Patience
7. Determination
8. Dependability
LEC. 6
To fulfill these goals and objectives the top management delegates power to
marketing management which further pass it to sales management which finally
set the future operations.
The duty of a sales manager is to look after and managing the company’s personal
selling for achieving this goal he has to adopt sales management goal setting
process which is as follows:
1. Analysis :
(a)to analyse the sales records
(b)reports of sales people
(c) knowing market trends
(d) other environmental factors
2. Planning :
(a) formulating goals for the company’s sales efforts
(b)developing sales strategies and policies for achieving those goals
3. Organization :
(a)formation of sales force
(b)delegation of authority for achieving company’s goal
4. Direction :
(a)to supervise and implement the plans properly and in the direct direction
(b)for this proper communication motivation and right leadership is required
5. Control :
(a)to find out the difference between actual and targeted results
(b)to find out the cause of deviation , if any
(c) ultimately taking corrective action to solve them
LEC. 7
According to Philip Kotler, “ Market demand for a product is the total volume that would be
bought by a defined customer group in a defined geographical area in a defined time period
in a defined marketing environment under a defined marketing program.”
(a) Current market demand : it consist of two types of assessment which are:
1. Total market demand : this can be calculated by sales forecasting.
2. Area market demand :
(i)It refers to the demand within a particular area which can be either a district,
state or country.
(ii)It has two methods
(a) Market build up method: It identifies :
(i)the quantity of potential buyers in each market and
(ii)to estimate the quantity of their potential buying
(b)Market factor index method : It identifies :
(i)those market factors which have coordination with market potential and
(ii)then these factors unite them with a weighted index
SALES POTENTIAL:
According to Still and Cundiff, “ A sales potential is an estimate of the maximum possible sales
opportunities present in a particular market segment open to a company selling a good or
service during a stated future period.”
(i) Some firms lack sufficient production capacity to achieve the full sales potential.
(ii) Other firms lack distributive networks to reach every potential customer .
(iii) Others do not consider their total sales potential due to lack of their financial
resources
(iv) Still others are more profit oriented rather sales oriented.
Thus the estimate for sales potential shows how much a firm can sell if it had all
necessary requirements and ready to use them.
Lec. 8
The following methods and techniques are used for forecasting sales of a company:
Most common and prevalent method. The base of this method is judgement hence
also called executive opinion method. In this method all the participants give their
judgement and opinions. The final forecast is determined by averaging these
opinions.
Sales Budget:
There are many factors which must be considered while preparing a sales budget. It can
be divided into following two parts-
1. Internal factors:
Important internal factors which affecting the sales budget are as under-
2. External Factors:
External Factors affecting the preparation of a sales budget, These are as under:
Selling task varies from customer to customer, and market to market. To take
an extreme example, a salesman may sell a single product to several different
types of customers. Another extreme is to sell a diversity of products to a
single types of customer . sales persons can be product specialists or market
specialists or product market specialists.
A sales person’s role in securing orders also affect the type of sales persons
required. In different selling environments, the order securing process operates
differently, e.g., some have to solicit orders aggressively such as computer
salesman whereas some just accept orders which come their way such as a
salesman of government textbooks prescribed for primary and secondary
schools.
The four basic selling styles: trade selling , technical selling, missionary selling
and new-business selling.
Trade selling tries to establish long-term relationship with the customers. This is
a routine job. In wholesale trade, this style is used extensively.
New-business selling tries to identify new customers and secure orders from
them. He converts the prospects into customers. Selling for him is a creative job.
He should have good selling skills.
LEC. 10
Sales territory
It means dividing the market into similar customers making homogeneous market area.
Market data is more useful when collected and applied at the territory level. To
implement planning and control the market area should be broken up into a number of
well designated sales territories.
Definition
According to Still & Cundiff, “A sales territory is a grouping of customers and prospects
assigned to an individual sales person.”
SALES QUOTAS
Quotas are quantitative objectives which are assigned to individual sales personnel or a
sales unit (a district or region or territory) for a particular period of time by the sales
department. These appraise the selling effectiveness of the company.
sales quota is a goal in terms quantity given to a sales representative, or a group of sales
representatives over a period of time. Sales quota may be assigned to a region , territory,
branch office. It may be assigned to a distributor too. Sales quotas are the tools of planning
and control.
Sales quotas are based on sales forecasts and sales potentials of different markets. The
more accurate the data used in formulating the sales quotas, the more effectives quotas
become. Sales efforts is controlled by using quotas. It helps in appraisal. It helps in
controlling expenses. Quotas provide a quantitative performance standards. Quotas are used
as performance criteria in sales contests.
Sales forecast is the first step in setting up quotas. It leads to the sales budget. In the budget,
there is a provision for setting quotas as performance standards.
UNIT 2
Lec. 11
The success of any sales organization depends upon the ability, skill and willingness of the
sales force in achieving the desired sales objectives. The willingness to do the work will
enhance his performance level. The willingness depends upon the motivation he gets. Thus,
motivation provides willingness which is quite different from his ability or capacity in doing
his job. Therefore, there are two factors in determining the performance of the salesforce
which are his-
Lec. 12
The following Common approaches are used in organizing the sales force:
Lec. 13
Sales force structure:
(i) It requires when the company sells different variety of products to different types of
customers over a large geographical area.
(ii) It combines many types of sales force structures.
(iii) Sales people are trained for territorial or product or market structure knowledge.
(iv) Then, these sales people have to report to one or more line and staff managers.
The sales force is very important in marketing mix. Hence, companies need to carefully
consider when and how to use sales representatives. For this, companies are substituting
inside mail and phone based selling units to reduce field sales expenses and they are trying to
increase the productivity of the remaining sales force through better selection, training,
motivation and compensation. Sales personnel serve as the company’s personal link to the
customer.
Lec. 14
(i) It is the most important asset and major component of company’s promotion mix.
(ii) It decides the company’s fate as revenues are provided through sales.
(iii) Its effectiveness determines overall marketing objectives of the firm.
(iv) Sales force is required for various kinds of services.
(i) A company after formulating its sales force strategy and structure start
considering its sales force size.
(ii) It is usually fixed at the optimum level.
(iii) It includes expected level of sales together with the number of sales persons
required for such sales.
(iv) Increasing the number of their sales representatives will increase both sales and
costs.
(v) Thus, the sales force size can be established on the number of customers they
want to tackle.
Lec. 15
The main responsibility of any company’s sales executives is to recruit and select the
executive should implement personal – selling strategy in considering both the kind and
quantity of sales personnel.
Importance of recruitment:
(i) It is essential to carry out the selling activities of the company to recruit the
right type of sales person having all the desired qualities.
(ii) For this, a sound recruitment policy is required for the success of any organization.
(iii) The management should choose the right man for the right job or else they will
become burden on them.
(iv) A stable and efficient work force can only achieve organizational goals and
objectives in a systematic planned manner.
(v) Only a right type of sales force once recruited can increase sales and profit to
an organization.
(vi) Thus, recruitment of salesman in an endless job for any company.
1. Vacancy created
2. Expansion programmes
Sources of recruitment :
1. Internal sources
2. External sources
(i) Advertisement
(ii) Employment agencies
(iii) Existing employees
(iv) Older people
(v) Salesman of non-competing companies
(vi) Salesman of competing companies
(vii) Direct application
(viii) Wholesellers and retailer
Lec. 16
After determining the type and number of sales persons the sales department requires, the
applications for the job have been received, the company is prepared to deal with the final
stage of the selection system i.e., selection process. It involves to select the individuals out
of the so many applicants which best fit the needs of the company.
The main purpose of selection is to find out the right person for the right job in an enterprise.
Applications
Preliminary interview
Qualifications
References
Testing
Physical conditions
Employment offer
Lec. 17
Motivation is behaviour towards reaching the desired goal. The need within individual leads a
person to act so as to achieve it. Thus, motivation for sales personnel is amount of effort
required for his sales job i.e.,
1. To improve efficiency
2. To remove tension
3. Keep them satisfied
4. Provide human treatment
5. Motivation tools
(i) Effective sales executives act as leaders of sales personnel and get voluntary
cooperation from them to reach the sales department’s goal.
(ii) They very well know the motives, desires and ambitions of the sales persons and
use this knowledge to guide them in their activities.
(iii) The leadership requires to keep good relationship with the sales personnel which
requires skills, experience, maturity and common sense.
(iv) They should treat them fairly in assigning jobs, promotions and remunerations etc.
Lec. 18
The increasing demand of demand of present world of marketing requires competent and
well trained salesman as a company’s success and progress depend greatly on the efficiency
of its sales force. now-a-days only proper trained sales person can improve the maximum
potentiality of any organization hence, well trained sales force can be a valuable asset for it to
face the modern marketing.
(i) The techniques and developments of sales keeps on changing with the time
hence to cope with it training is a necessity for every big concern.
(ii) Thus, the salesman learning new techniques can greatly enhance the volume of
sales and profits for the organization and a better remuneration for themselves.
(iii) Training helps the salesman how to best influence their customers.
(iv) Training helps the sales force gaining essential knowledge about products,
customers and himself.
(v) A trained sales person can easily face adamant customers with confidence.
(vi) The supervisory efforts and managerial control become lesser with trained
salesman.
(vii) Training build up his morale and self confidence to face any situation of the
modern marketing.
Compensation is essential to keep sales force morale high and to enable them to contribute
to its maximum for any enterprise. Though, the direct salary and allowance are more or
less similar for all companies yet they differ in indirect benefits such as incentives and
perquisites. Hence, the present general trend is towards increasing the indirect incentives
of the sales force.
Lec. 19 & 20
Sales force management create sales contests to motivate the sales personnel in achieving
higher sales in a given period of time. Thus, it is a unique selling campaign to award beyond
the compensation plans. These also provide incentive techniques for different sales situations.
The sales contest is used for both customers and dealers. Both of them are motivated to use
the company’s product and get certain awards like cash prizes or free ticket for some foreign
trips or attractive gifts.
Planning is essential for a successful sales contest according to the customer needs. Hence,
an experienced person can only organise a good sales contest as it is a special selling
technique which offers incentives in the form of prizes or awards which are not included in
compensation plan. Thus, it provide extra incentives to increase more profitable sales
volume.
Sales contest objectives
Evaluation of contest
Evaluation of such contests can be done in two ways i.e, before and after the sales
contest. Thus,
Both these pre and post evaluation rectify alternatives, effects, design, fairness and impact
upon the sales force morale.
1. Alternatives
(i) A sales contest will not be successful if serious defects exist in it.
(ii) Incompetent supervision or a bad compensation plan will not rectify
deficiencies caused temporarily or permanently in a sales contest.
(iii) The main purpose of sales contest is to provide extra incentives, to enhance
sales volume so that more profitable volumes can be accomplished.
(iv) Thus, when a sales contest is considered, other methods of improving selling
efficiency should be taken into account for getting probable results.
2. Effects
(i) A sales contest is considered successful if it increases sales volume, bringing
in more profitable volume or both in the short as well as long term effects.
(ii) Thus, successful contests enhance both contest period sales and long run sales
as they provide good selling methods to sales personnel.
3. Design
(i) The sales contest should be well designed to provide motivation in achieving
the desired goal .
(ii) The profit of sales volume should also cover the cost of sales contest.
(iii) The contest format should tie directly with the specific objectives which
could be easily understood and move towards promotion.
4. Fairness
(i) The management should see that the contest format and rules provide
everyone a fair chance of winning.
(ii) When the contest takes place , every sales personnel should feel that he
has full chance of winning it.
5. Impact
(i) the impact of successful sales contest provide a permanent higher level of
sales force morale.
(ii) There are chances of personal rivalries and creating jealousy among the
sales force if the sales contest format is meant for individual awards.
(iii) Hence, the manager should organize teams and place the emphasis on
competition among them for recognition rather than individuals.