NMIMS

SALES MANAGEMENT
APPLICABLE FOR JUNE 2022

1. Sales organizations should be adaptable to changing circumstances and emerging

marketing environment, failing which the structure as well as process will become
redundant. Explain the above proposition with examples of two Indian organizations by
explaining their evolution over different periods of time.

Answer:

'Sales' is that important activity of an organization which determines the 'topline' of the
organization's income statement. Therefore, its importance can be judged from the fact that
without this first line of entry, there can be no 'income statement'! Additionally, being a
primary business function impacting the income of an organization, sales is also termed as a
line function (akin to production, purchasing) as opposed to functions like finance or HR,
which, due to their indirect linkage to income and support nature of activities, are termed as
staff functions. Management of sales people and functions is therefore a core activity of an
organization and its efficacy impacts the organization's profitability in a significant manner.

Sales people are the backbone of the organization because they have to face customer and
interact with them. Some people say, salesmen are born salesmen, while others believe that
training can help in making good salesmen. Irrespective of these opinions, good salesman
has certain qualities and abilities as a result he is able to perform better than others.

Sales organization structure:

An organization can be viewed as a body formed with an objective of achieving specified

goals. The design of the organization pertains to its structure, the path chosen for achieving
set goals, the process adopted and myriad variables. The structure, which is one of the core
elements defining an organization is also not static and evolves over time, as per the

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perceived need to fulfil the goals. If sound practices are followed in setting up the sales
department, the resulting structure takes on features of one or more of four basic types:
line, line and staff, functional and committee. The grouping of activities into positions and
the charting of relationships of positions causes the organisation to take on structural form.

Changing ways of working and behaviour is hard since sales reps are often spread out
geographically and used to have a flexible role. Still, strong competition and the increasing
demands from our customers set the bar high, and any sales force not able to reach this bar
will face cost cutting and layoffs. Examples of this exist all around us; sales organizations
who do not meet their numbers in today’s booming market, simply haven’t got what it
takes. Hence sales organizations need to motivate sales reps and improve their sale skills.
Typically this is addressed by a single training session in sales technique, but that isn’t going
to be enough to ensure a lasting change.

Patanjali
Patanjali is one of the biggest FMCG companies operating in India and having millions of
customers under its base. Nestle was found in the year 2006. Word of Patanjali’s success
spreads rapidly, and through determination, commitment, and a pioneering spirit it builds a
thriving business. His innovation is the model for all those that follow throughout Patanjali’s
15 years, which show the company’s skill in meeting and anticipating consumers’ changing
needs. Ayurveda has its foundation laid in ancient times as a healthcare approach but
people have been neglecting it. So, there when Patanjali came into the picture to make India
an ideal place for the growth and development of Ayurveda and a prototype for the rest of
the world by upbringing awareness among people.

Before Patanjali, there were many limited players which were offering or focusing on
ayurvedic products so Patanjali took complete advantage of this opportunity. Baba Ramdev
made an unpredictable plan of action for selling ayurvedic items. He never introduced his
products as ayurvedic medications in the market; he propelled them as FMCG products.

As there were many strong FMCG players, Patanjali introduced similar products at low
prices and acquired many new customers. Patanjali aims to give great quality items at low

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costs. As the time passed, Patanjali understood the importance of having swadeshi products
so it involved in Make in India campaign. Patanjali Ayurved Ltd. built its one-of-a-kind retail
organization. It began selling products through its own channels of super distributors,
distributors, Chikitsalayas (franchise dispensaries), and Arogya Kendras. When Maggi
controversy was there, it took complete advantage of the same and promoted its atta
noodles. Patanjali launched the products as per the needs of the customers and evolved in
last few years. Patanjali is expected to go a long way in the future, only if it manages to keep
itself ahead of competitors.

Amul
Amul is a market leader in dairy products and doing really well. Amul was founded in 1946
and soon started to rule the market. Amul initially started with one plant in Anand but as
the demand was increased and it got the success, it expanded the operations on large scale.
Within a short period, the success at the cooperative's dairy spread to Anand's
neighbourhood in Gujarat. Thus, five unions in other districts like Mehsana, Banaskantha,
Baroda, Sabarkantha, and Surat were set up by following the approach sometimes referred
to as the 'Anand pattern'. Amul pursues a unique plan of action in which 'esteem for cash'
items are given to its purchasers while securing the premiums (as a proprietor) of the milk-
producing farmers who are its providers.

Since the beginning, there was an assumption that this activity would directly profit and
change poor farmers and adds to the improvement of society. Markets, at that point and
even today, are crude and poor in the foundation. Amul and GCMMF recognized that
improvement and development couldn't be left to market powers and that proactive
intercession was required. With the changing business environment, Amul changed its
business and marketing strategy like adding more and more products as per the demand
and market needs, using different channels for promoting the business and products. It
always tried to innovate its marketing techniques and improved its supply chain to serve the
customers in better way.

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2. Bob Jones, sales manager for Steelhouse Industries, a manufacturer and marketer of
heavy-duty industrial construction equipment has just finished evaluating several sales
candidates for a vacant position. He has narrowed the list to two candidates that stand
out. Both Russ and Susan meet the job qualification. In fact, on paper Susan appears to be
a stronger candidate, having nearly twice as much industry-related sales experience as
Russ. Bob, however, believes that the construction industry is a man’s world. He fears that
many of Steelhouse’s customers (and even its own employees) may not respect a women
sales person. Thus, even though Susan appears to be the most qualified for the position,
Bob is leaning towards hiring Russ. What should Bob do and why?

Answer:

'Sales' is that important activity of an organization which determines the 'topline' of the
organization's income statement. Therefore, its importance can be judged from the fact that
without this first line of entry, there can be no 'income statement'! Additionally, being a
primary business function impacting the income of an organization, sales is also termed as a
line function (akin to production, purchasing) as opposed to functions like finance or HR,
which, due to their indirect linkage to income and support nature of activities, are termed as
staff functions. Management of sales people and functions is therefore a core activity of an
organization and its efficacy impacts the organization's profitability in a significant manner.

Sales people are the backbone of the organization because they have to face customer and
interact with them. Some people say, salesmen are born salesmen, while others believe that
training can help in making good salesmen. Irrespective of these opinions, good salesman
has certain qualities and abilities as a result he is able to perform better than others.

The job of sales personnel involves a number of responsibilities. It is the income producing
division of a business. The salesperson is responsible for:
 Providing profit contribution to the organization
 Creating a proper image for the company and it's products/services
 Achieving the sales targets of the organization
 Satisfying the customers and participating in marketing activities

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  He/she is responsible to the customer and society for continuing growth of the
organization. He has multifarious activities, including setting goals and achieving
them, building sales organizations and managing them.

Skill sets of sales person

 Ability to estimate customer's needs and desires: He/She is alert and quickly
determines what the customer wants and the best way to sell.
 Ambition: He/She likes to do a good job and is interested in getting ahead with
company’s goals and sales objectives.
 Appearance: Appearance means a lot today and the successful salesman is neat and
organized. He/She presents himself well in person. Also, he keeps his desk books and
manuals neat and ready for use.
 Business sense: He is quick to learn the strengths and weaknesses of the company
and makes an effort to improvise on the company’s strengths.
 Courtesy: He/She reveals a sincere desire to help customers and treats them as
guests even when he visits their places of business.
 Creativeness: Imagination, vision and the ability to create ideas make your man
dynamic.
 Enthusiasm: A salesman must radiate enthusiasm during and after the sales call.
 Figure sense: He/She should have the mathematical ability to figure and fill up order
form correctly and to make the necessary reports.
 Flexibility: A good salesman is able to adapt himself to a variety of customers. Each
contact may require adapting the sales talk, speech habits and even appearance.
 Friendliness: A salesman should be able to make people like him and he must like to
meet people.
 Health: Good health generates energy and energy is needed to sell. Poor health
prevents many salesmen from fulfilling their potentials.
 Integrity: A salesman must be trusted to do his job well. He cannot help but he
successful when his customers trust him.
 Interest in his job: He likes selling and working for the company.

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  Knowledge: In some business, sales person must also have a thorough knowledge of
the highly specialized products or services his employer offers. In some cases, this
knowledge can be gained only by years of experience.
 Loyalty: He/She must be able to impress upon his customers the idea that his
company is the best in the business.
 Mental abilities: He has the intelligence to understand your products and those of
your competitors. He must know how to use words, to understand and direct people
and to remember names and faces. He should also be able to understand
prospective customers and know how to act under varying conditions.
 Motivation: He/She must have more than just an interest in selling. They live in the
present and not in the future. They do want power over others and prefer not to
work under close supervision.

Male vs Female sales person

Gone are the days when females were used to just sit at home and do the chores. A lot of
things have changed in past 10 years and now they are doing equally well as males. If we
check, in all the fields, they are making us proud like females are working as pilot, auto
driver, chefs in hotels, mechanical engineer, motivational speaker etc. With this, it is clear
that, they are very much talented and it is not correct to treat them as if they are not
capable of doing anything.

In the given case, it is clearly mentioned that, Susan appears to be a stronger candidate,
having nearly twice as much industry-related sales experience as Russ. Bob, however,
believes that the construction industry is a man’s world. He fears that many of Steelhouse’s
customers (and even its own employees) may not respect a women sales person. I do not
agree with Bob here, if the candidate is skilled, knowledgeable and experienced and really
help you professionally, there should not be any doubt in hiring her. Time has changed and
now women can play any role easily and effectively.

I have mentioned some skills of sales person and with the details mentioned in the question,
Susan may have all of them. In this scenario, she is the right choice for the position and if
the sales person is skilled, experienced and good team leader, other people would also

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listen to him or her. I believe Bob should change his perception and hire Susan for the
position.

3.a. The new marketing strategy of Steel Tubes Limited (STL) focuses on selling CEW (cold
drawn electric welded) tubes more than ERW (Electric Resistance Welded) tubes. This
marketing strategy was implemented to address very low profits of the company and
improve profitability. Recommend an appropriate sales quota system and substantiate
your recommendation.

3.b. As a Regional Sale Manager (North) of a shoe company, you have decided to promote
one of the salespersons as a branch manager for a new branch at Karnal in Haryana. What
kind of training would you conduct for this salesperson?

Answer: a)

The sales job is unique in its ability to provide a varying income to its personnel.
In fact, to an extent (in line with organizational policies), influencing the quantum of his own
earnings is in the hands of the salesperson. This unique feature is caused by two basic
factors:
(i) The easily measurable responsibilities and the output of the members of the sales team
in an objective manner,
(ii) The need for the organization to continuously grow through increased sales and
consequent linkage of sales force compensation to the salesperson's performance.

Sales quota
The sales targets in the form of sales territory, districts or branches are assigned to sales
personnel are referred to as sales quota. Essentially, sales quotas are assigned for individual
sales personnel, for a team, a region and for the entire sales function as a whole. It is used
to design, organize and assess the selling activities of the company. Based on sales forecast
and budget, sales quotas are prepared. The Principle of Quota Setting is referred as SMART
i.e Quota should be Specific, Measurable, Attainable, Realistic, Time specific.

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Insight into Administration of Sales Quotas
• Set-up reasonable quotas
• Interpret the issues coming up in setting quotas
• Make certain that the sales personnel understand and accept their quotas
• Permit sales personnel to be a part of the process
• The sales personnel should be regularly apprised about his performance
In relation to the quotas
• Be adaptable in administering quotas
• Change quotas in case major changes take place in the company procedures or market
requirements
• Use monthly or quarterly quotas for incentives and annual quotas for performance
evaluation
• Choose some quotas that are associated with the marketing background and sales
situations

Sales quota system in given case

As given in the question, Steel Tubes Limited (STL) focuses on selling CEW (cold drawn
electric welded) tubes more than ERW (Electric Resistance Welded) tubes. This marketing
strategy was implemented to address very low profits of the company. It is clear that,
company sells various products but now mainly focusing on CEW to increase the
profitability. In this scenario, profit quota would be appropriate. A profit-based quota is set
for the sales representatives in such a way that they have to earn a certain revenue for the
company by selling products or services for a certain amount of money. It is used in
companies having multiple products where variety of products add to different levels of
earnings and helps in concentrating on the high revenue products sold by the sales person.

b)

Training helps people in choosing, utilising and evaluating their experiences. Different
people have defined training in different ways. According to H. John Bernardin, “Training is
any attempt to improve employee performance on a currently held job or one related to it.”

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In other words, we can say that training focuses on current jobs and it is concerned with
specific job skills and behaviour.

A training program should give following resulting changes:

Reaction: Reaction refers to attitude of employee about the training, whether the employee
considers training to be positive or negative one. If reaction is positive then people have
accepted the program and changes will be possible.
Learning: Another method of judging effectiveness is to identify levels of learning i.e. how
much the people have learnt during the training. This can be found out by trainers mark
sheet, the report submitted by the employee, and actual performance.
Behaviour: The HR department needs to understand behaviour of the employees, to
understand the effectiveness of training. The behavioural change can be seen in how the
person interacts with juniors, peer groups and seniors. They mark change in behaviour and
inform the HR department of the success of training program.
Result: Results provided by employee in monetary terms also determines effectiveness of
training program i.e. employee success in handling the project, the group performance
before and after training etc.

Type of training required in the given case:

As given in the question, one sales person is to be promoted as brand manager in Haryana
so as he is already working in actual, on the job training would be good here. The
instructional effectiveness of this method depends mainly upon the coach’s qualifications.
Given a qualified coach, the trainee starts off on the right foot, using appropriate selling
techniques. Early deficiencies are corrected before they harden into habits. If, however, the
coach is not qualified, the trainee learns the coach’s bad habits as well as skills. Many
seasoned salespeople, otherwise qualified for coaching, are unwilling to spend the
necessary time and effort. This is especially true when personnel are paid commissions on
sales. The problem of recruiting coaches, nevertheless, is resolved through paying bonuses
for each person coached, or “overriding” commissions on pupils’ sales. On-the-job training is
an important part of most initial sales training programs. No more effective way exists for

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learning a job. This method is appropriate for developing trainees’ skills in making sales
presentations, answering objections, and closing sales. Training in these selling aspects
requires practice, and this method provides expertly supervised practice.

Sales person may train on below topics:

Goal setting: Organizations that only set a goal of month-to-month survival are missing out
on the multiple benefits that a long-term plan can provide. Setting goals helps outline the
path that an organization must take to achieve desirable outcomes.

Marketing strategies: In any organisation, the sales department plays a pivotal role in the
success of the business. The unique and important role of sales is to bridge the gap between
the potential customer’s needs and the products/services that the organisation offers that
can fulfil their needs. Marketing strategy provides an organization an edge over its
competitors and helps in developing goods and services with best profit-making potential.

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