SAD / BU / M1 1/ 30

SALES AND DISTRIBUTION MANAGEMENT OBJECTIVES :

1. CONCEPTS & PRINCIPLES OF SAD 2. SKILLS RE PERSONAL SELLING & PHYSICAL DISTRIBUTION.
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SALES MANAGEMENT : MODULE 1 (M 1)

1.
1.1. 1.2. 1.3. 1.4.

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NATURE & IMPORTANCE OF SALES MANAGEMENT . WHAT IS SALES MANAGEMENT (SM) ? RESPONSIBILITIES / FUNCTIONS OF A SALES MANAGER. OBJECTIVES & GOALS OF SALES MANAGEMENT. IMPORTANCE OF SALES MANAGEMENT. www.a2zmba.com

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1.1. WHAT IS SALES MANAGEMENT (SM) ?

AMERICAN MARKETING ASSOCIATIONS DEFINATION : SALES MANAGEMENT IS PLANNING, DIRECTING, & CONTROLLING OF PERSONAL SELLING, INCLUDING RECRUITING, SELECTING, TRAINING, DIRECTING, COMPENSATING, MOTIVATING, EVALUATING, CONTROLLING THE SALES FORCE. IN SHORT, SM IS MANAGEMENT OF SALES FORCE. HOWEVER, MODERN SALES MANAGERS HAVEwww.a2zmba.com MORE RESPONSIBILITES.

1.1. RESPONSIBILITIES / FUNCTIONS OF A SALES MANAGER.

SALES PLANNING. ( + ) ORGANISING SALES FORCE. ( + ) MANAGING THE SALES FORCE. ( + ) COORDINATION WITHIN & OUTSIDE THE COMPANY. ( + ) MEMBER OF DECISION MAKING TEAM. (+) FOR BRANCH / TERRITORY / AREA / REGIONAL SALES MANAGERS.
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SM / BU / M1 5/ 30

1.3. OBJECTIVES & GOALS OF SALES MANAGEMENT (*) (A) SALES VOLUME (IN UNITS & VALUE) (B) SALES GROWTH (C) CONTRIBUTION TO PROFITS (D) CUSTOMER SATISFACTION / DELIGHT. (*) SM HAS PART RESPONSIBILITY.
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1.4. IMPORTANCE OF SALES MANAGEMENT.

SM IS THE MOST IMPORTANT PART OF MM. THE ONLY REVENUE GENERATING FUNCTION. COMPANY PERFORMANCE DEPENDS ON SM PERFORMANCE.
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SM / BU / M1 7/ 30

MARKETING TEAM HAS 2 GROUPS : (A) FIELD SALES FORCE ; (B) H.Q. MARKETING TEAM.
MARKETING HEAD

SALES MANAGER

MANAGER M. R. MANAGER PROMOTION MANAGER SERVICES

ASM ASM ASM (N) (E) (W)

ASM (S)

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SM / BU / M1 8/ 30

2.0. DIMENSIONS OF SM
2.1. CAREER PATH IN SM. 2.2. SKILLS REQUIRED FOR SM. 2.3. TEAM SELLING . 2.4. MAJOR REASONS FOR THE
SALES MANAGERS FAILURE.

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SM / BU / M1 9/ 30

2.1. CAREER PATH IN SM.

SALES TRAINEE / REP. SALES / MARKETING EXECUTIVE AREA / BR. / REG. SALES MANAGER NATIONAL SALES MANAGER GM / VP MARKETING CEO / MD / PRESIDENT (31%)

FIELD EXPERIENCE ; MAXM. OPPORTUNITIES; HIGHER INCOME; EXCITING LINE FUNCTION; NEVER BORING.

2.2. SKILLS REQUIRED FOR SM

INTERPERSONAL; COMMUNICATION & LISTENING; TECHNICAL; MANAGERIAL.

2.3. REASONS FOR FAILURE IN SM.

LEADERSHIP & MANAGERIAL ABILITIES ; INADEQUATE SM TRAINING ; SALES INSTEAD OF MARKETING ORIENTATION. www.a2zmba.com

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3.0. PLANNING SALES.

3.1. PLANNING IS TO DECIDE TODAY WHAT TO DO IN FUTURE. SALES PLANNING IS TO DECIDE NOW WHAT ARE THE SALES GOALS & HOW TO ACHIEVE THEM.

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3.2. STEPS IN SALES PLANNING PROCESS.

SITUATIONAL ANALYSIS : SWOT. ESTIMATE MARKET POTENTIAL. FORECAST COMPANY SALES. SET OBJECTIVES & GOALS (COMPANY & TERRITORIES) DEVELOP STRATEGIES (COMPANY & TERRITORIES). DECIDE ACTION PLAN. ALLOCATE RESOURCES. IMPLEMENT THE PLAN. CONTROL THE PLAN. www.a2zmba.com

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3.3. DEFINATIONS OF IMPORTANT TERMS.

MARKET POTENTIAL. IT IS THE MAXIMUM POSSIBLE ESTIMATED SALES, FOR A PRODUCT / SERVICE, IN A MARKET SEGMENT, IN A TIME PERIOD, IN A GEOGRAPHIC AREA, FOR A GIVEN MARKETING ENVIRONMENT. IT INCLUDES ESTIMATED SALES OF ALL SELLERS IN A MARKET/INDUSTRY. IT RESULTS FROM VERY HIGH LEVEL OF INDUSTRY MARKETING EXPENDITURE / EFFORTS OF ALL SELLERS. IN PRACTICE, MARKET POTENTIAL, MARKET DEMAND, INDUSTRY SALES FORECAST ARE ALMOST SAME. www.a2zmba.com

SM / BU / M1 13/ 30

SALES POTENTIAL. IT IS THE MAXIMUM POSSIBLE ESTIMATED SALES OF A COMPANY, FOR A PRODUCT/SERVICE, IN A TIME PERIOD, IN A GEOGRAPHICAL AREA, IN A MARKETING ENVIRONMENT. IT IS HIGHER THAN COMPANY SALES FORECAST, WHICH IS AN ESTIMATED SALES, BASED ON A CHOSEN LEVEL OF MARKETING EXPENDITURE.
SALES POTENTIAL = MARKET POTENTIAL X OF A COMPANY. EXT. MARKET SHARE

SALES BUDGET. IT IS A CONSERVATIVE ESTIMATE OF THE COMPANYS SALES FORECAST AND IS SLIGHTLY LOWER THAN COMPANY SALES FORECAST. IT TRIES TO AVOID EXCESSIVE RISK. www.a2zmba.com

SM / BU / M1 14/ 30

3.4 FORECASTING APPROACHES / CATEGORIES

1. BREAKDOWN / TOP DOWN APPROACH

i.

FORECAST GENERAL ENVIRONMENT CONDITIONS. ii. ESTIMATE INDUSTRYS MARKET POTENTIAL / SALES FOREAST. iii. FIND CURRENT & ESTIMATED FUTURE MARKET SHARE. iv. COMPANY SALES FORECAST = (ii) X (iii) v. PLAN COMPANYS SALES BUDGET & www.a2zmba.com OPERATIONAL PLANS

2. BUILD UP / BOTTOM UP APPROACH a. ASK EACH SALESPERSON EXPECTED SALES, OR SURVEY CUSTOMERS ABOUT WHAT THEY EXPECT TO BUY. b. AREA MANAGERS MODIFY & COMBINE SALES PERSONS FIGURES. c. AREA / REGIONAL SALES MANAGERS ESTIMATES ARE SUMMED UP / MODIFIED AND SENT FOR APPROVAL TO TOP MANAGEMENT. SOME FIRMS USE BOTH APPROACHES www.a2zmba.com FOR BETTER CONFIDENCE.

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3.5. SALES FORECASTING METHODS

ARE CLASSIFIED AS (A) QUALITATIVE, (B) QUANTITATIVE TECHNIQUES. EXECUTIVE OPENION.
OPENION / JUDGEMENT METHODS QUALITATIVE TECHNIQUES EXPERT OPENION / DELPHI METHOD COMPOSITE OF SALES FORCE. OPENION.

COUNTING METHODS
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SURVEY OF BUYERS INTENTIONS. TEST MARKETING / MARKET TESTING

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DECOMPOSITION TIME SERIES METHODS MOVING AVERAGES EXPONENTIAL SMOOTHING QUANTITATIVE TECHNIQUES BOX - JENKINS

CAUSAL / ASSOCIATION METHODS

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CORRELATION / REGRESSION ANALYSIS. ECONOMETRIC MODELS. INPUT / OUTPUT MODELS.

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4. ORGANISING THE SALES FORCE NATURE & CHARACTERISTICS

4.1 PURPOSES OF SALES ORGANISATION TO ACHIEVE LONG & SHORT TERM SALES & MARKETING OBJECTIVES & GOALS. TO RESPOND TO CHANGES IN MARKETING ENVIRONMENT, INCLUDING CUSTOMER NEEDS. TO PERFORM ALL NECESSARY ACTIVITIES, BY ASSIGNING THE TASKS TO SPECIFIC INDIVIDUALS. TO ACHIEVE EFFECTIVE COORDINATION & www.a2zmba.com COMMUNICATION

SM / BU / M1 19/ 30

4.2 UNDERSTAND CHARACTERISTICS OF TWO BASIC TYPES OF MARKETS : CONSUMER & BUSINESS.

SALES PEOPLE HAVE DIFFERENT ROLES TO FULFILL, DEPENDING ON PRODUCTS AND MARKETS.

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SM / BU / M1 20/ 30

4.3. SETTING UP / DESIGNING A SALES ORGANISATION MAJOR STEPS INVOLVED ARE : (A) DECIDE SALES DEPARTMENTS OBJECTIVES. (B) DETERMINE WHICH SALES ACTIVITES ARE NECESSARY. (C) GROUP ACTIVITIES TO DIFFERENT POSITIONS. (D) PROVIDE FOR COORDINATION & CONTROL. (E) ASSIGN EXISTING / NEW PERSONS TO VARIOUS POSITIONS. www.a2zmba.com

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5.0. BASIC TYPES OF SALES ORGANISATIONAL STRUCTURES

MOST COMPANIES STRUCTURE THEIR SALES DEPARTMENTS IN ONE OF THE FOLLOWING TYPES, DEPENDING ON THE FIRMS OBJECTIVES, NEEDS, PRODUCTS, COMPANY SIZE, CUSTOMERS & OTHER FACTORS. 5.1. LINE SALES ORGANISATION. 5.2. LINE & STAFF SALES ORGANISATION. 5.3. FUNCTIONAL SALES ORGANISATION. 5.4. COMMITTEE SALES ORGANISATION.
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SM / BU / M1 22/ 30

6.0. SPECIALISATION WITHIN SALES DEPARTMENT

MODERN MARKETING / SALES DEPARTMENTS ARE ORGANISED BY SPECIALISATION OR SPECIALISED DESIGN, AS FOLLOW: 6.1. GEOGRAPHIC SPECIALISATION / ORGANISATION. 6.2. PRODUCT / BRAND MANAGEMENT ORGANISATION. 6.3. CUSTOMER / MARKET MANAGEMENT ORGANISATION. 6.4. COMBINATION ORGANISATION. www.a2zmba.com

(1) LINE SALES ORGANISATION.

LINE AUTHORITY PERSON CAN DIRECT & CONTROL IMMEDIATE SUBORDINATES.

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V. P. / G. M. SALES MGR

AREA SALES MANAGER - 1

SALES PEOPLE

AREA SALES MANAGER - 2

SALES PEOPLE

AREA SALES MANAGER - 3

SALES PEOPLE

ASST. SALES MGR - H. Q.

OFFICE STAFF

ADVANTAGES : USEFUL FOR SMALL FIRMS, SIMPLE, CLEAR AUTHORITY, LESS COST.

DISADVANTAGES : NOT PROPER FOR LARGE ORGNS., AS LINE, MGRS ACTIVITIES INCREASE, MAKING THEM INEFFECTIVE. www.a2zmba.com

SM / BU / M1 24/ 30

(2) LINE & STAFF SALES ORGANISATION.

STAFF AUTHORIY PERSON CAN ADVISE / REECOMMEND.

V. P. MARKETING
M. R. MGR. AD / SP MGR.

MKT. SERV. MGR

SALES MGR.

REG. / BR. SALES MGRS. SALES PERSONS.

ADVANTAGES : BETTER MKT. DECISIONS. BETTER SALES PERFORMCE. USEFUL FOR MED. / LARGE FIRMS

DISADVANTAGES : CONFLICT / CONFUSION, IF AUTHORITY IS NOT CLEAR. CORDINATION / CONTROL WORK & COST MAY INCREASE.

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(3) FUNCTIONAL SALES ORGN.

FUNCTIONAL SPECIALISTS.*

V. P. MARKETING

M. R. MGR.*

AD. / S.P. MGR*

SALES MGR.*

SERVICE MGR.*

SALES PEOPLE
ADVANTAGES : SIMPLE TO ADMINISTER ALL FUNCTIONAL MANAGERS GIVEN LINE AUTHORITY. QUALIFIED SPECIALISTS GUIDE SALES PERSONS. DISADVANTAGES : CONFUSING AS SALES PEOPLE HAVE MANY BOSSES. COORDINATION AT V.P. LEVEL. COSTLY FOR SMALL / MED. FIRMS. LESS EFFECTIVE, IF PRODUCTS & MARKETS INCREASE.

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SPECIALISATION IN SALES DEPARTMENT.

BY (i) GEOGRAPHIC SPECIALISATION (ii) PRODUCT / BRAND MANAGEMENT, (iii) CUSTOMER / MARKET MANAGEMENT, (iv) COMBINATION.
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SM / BU / M1 - 27/30

(i) GEOGRAPHIC SPECIALISATION

FOR A LARGE COMPANY, SELLING IN NATIONAL MARKET. LIMITED PRODUCTS, & MARKET SEGMENTS.

V. P. (M K T G)
ADV. & S.P. MGR N. R. SALES MGR. BRANCH SALES MGRS. SALES PEOPLE E.R. SALES MGR. BRANCH SALES MGRS. SALES PEOPLE W.R. SALES MGR. BRANCH SALES MGRS. SALES PEOPLE S.R. SALES MGR. BRANCH SALES MGRS. SALES PEOPLE

ADVANTAGES : (a) SUPERIOR CUSTOMER SERVICE, (b) LOCAL PROBLEM SOLVING - SPEEDILY, (C) BETTER SALES FORCE CONTROL & MARKET COVERAGE. DISADVANTAGES : (x) HIGHER COSTS, www.a2zmba.com (y) MORE COORDINATION NEEDED.

SM / BU / M1 - 28/30

(ii) PRODUCT / BRAND SPECIALISATION.

NEEDED WHEN (a) LARGE No. OF PRODUCTS / BRANDS, (b) TECH. & NON-TECH. PRODUCTS, (c) DIFFERENT PRODUCTS TO DIFFERENT CUSTOMERS.

G. M. SALES
RM -NR ASM PD1
SALES PERSONS

RM -ER ASM PD2

SALES PERSONS

RM -WR ASM PD3

SALES PERSONS

RM -SR ASM PD4

SALES PERSONS

ADVANTAGES : (a) CLOSE ATTENTION TO EACH PRODUCT, (b) QUICK RESPONSE, (c) EFFECTIVE MARKETING - MIX. DISADVANTAGES : (x) MORE COSTS, (y) CUSTOMER IRRITATION, BECAUSE TWO OR MORE SALES PERSONS CALLING ON, (z) PRODUCT / BRAND MANAGERS NOT GIVEN www.a2zmba.com ENOUGH AUTHORITY.

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(iii) CUSTOMER / MARKET MGT. ORG.

NEEDED WHEN SIMILAR PRODUCTS ARE MARKETED TO DIFFERENT TYPES OF CUSTOMERS / MARKETS.

V.P. (MKTG)
RM -NR
RMMDEALER
SALES PERSONS

RM -ER
RMMINDUS.
SALES PERSONS

RM -WR

RM -SR

RMMGOVT.

PERSON ACCOUNEL-M -NTS-M

SALES PERSONS

ADVANTAGES : (a) MEETS CUSTOMER NEEDS. (b) BECOMES MARKET / CUSTOMER CENTRIC. DISADVANTAGES : (x) MORE COSTS.

(iv) COMBINATION ORGN.

LARGE FIRM WITH MANY PRODUCTS, SELLING TO MANY MARKETS. ADOPT (A) CORPORATE - DIVISIONAL ORIGINATION (IS SIMILAR TO PRODUCT / BRAND SPECIALISATION) OR www.a2zmba.com (B) PRODUCT - MARKET MATRIX ORG.

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DMMs (PRODUCT MGS)

PRODUCT-MARKET MATRIX ORG. RMMs (MARKET MGRS) at NR, ER, WR, SR.
M/C-I M/C-II TRAN SG LIG.

DMMs AT FACTORIES, & RMMs ARE AT REGIONS. MATRIX ORG. NEEDED FOR MULTIPRODUCT, MULTI-MARKET FIRM.

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SALES MANAGEMENT MODULE 2 (M2) MANAGEMENT OF SALES FORCE INCLUDES:

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1. 2. 3. 4. 5.

SALES FORCE STAFFING TRAINING THE SALES FORCE. DIRECTING THE SALES FORCE. SALES QUOTAS & COMPENSATION. MOTIVATING & LEADING THE SALES FORCE. 6. CONTROLLING & EVALUATING THE SALES FORCE.
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SM / BU / M2 1/2-12

SALES FORCE STAFFING PROCESS

IT INCLUDES: (A) SALES FORCE PLANNING AND (B) EMPLOYMENT PLANNING (A) SALES FORCE PLANNING / DESIGNING CONSISTS OF A1. SALES FORCE OBJECTIVES & STRATEGIES. A2. SALES FORCE ORGANIZATION STRUCTURE A3. SALES FORCE SIZE. A4. SALES FORCE COMPENSATION.
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SM / BU / M2 1/3-12

(A) EMPLOYMENT PLANNING CONSISTS OF B1. RECRUITING PHASE. B2. SELECTION PHASE. B3. SOCIALIZING (HIRING & ASSIMILATION) PHASE. A1. SALES FORCE OBJECTIVES & STRATEGIES SALES FORCE OBJECTIVES MAY INCLUDE SALES QUOTAS, CONTRIBUTION TO PROFITS, SALES/COST RATIOS, MARKET SHARE,www.a2zmba.com SALES GROWTH, CUSTOMER SATISFACTION, ETC.

SM / BU / M2 1/4-12

SALES STRATEGIES MAY CONSIST OF (A) RELATIONSHIP MARKETING & TEAM SELLING FOR MAJOR & NATIONAL ACCOUNTS, (B) MAINTAIN MARKET FOCUS, (C) 80-20 EXISTING & PROSPECTIVE CUSTOMERS, (D) 85-15 TIME FOR EXISTING & NEW PRODUCTS. A2. SALES FORCE ORGANIZATION STRUCTURE. SELECT APPROPRIATE ORGANISATION STRUCTURE, BASED ON THE COMPANY NEEDS. ALREADY DISCUSSED.
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SM / BU / M2 1/5-12

A3. SALES FORCE SIZE. AFTER DECIDING NO. OF CUSTOMERS & THEIR SALES POTENTIAL, SALES FORCE SIZE IS DECIDED, USING WORK LOAD APPROACH, WITH FOLLOWING STEPS. CUSTOMERS ARE GROUPED INTO A, B, C CLASSES, BASED ON THEIR SALES POTENTIAL (OR YEARLY SALES QUOTA). DECIDE DESIRED CALL FREQUENCIES (NO. OF CALLS P.A. FOR EACH CUSTOMER CLASS). CALCULATE TOTAL WORKLOAD TO COVER ENTIRE MARKET = NO. OF CUSTOMERS PER CUSTOMER CLASS X DESIRABLE CALL www.a2zmba.com FREQUENCY FOR EACH CLASS.

 DECIDE AVERAGE NO. OF CALLS PER SALES REP. PER YEAR. NO. OF SALES REPS. NEEDED (SALES FORCE SIZE) = TOTAL WORKLOAD DIVIDED BY AVERAGE ANNUAL CALLS PER SALES REP. A4. SALES FORCE COMPENSATION. WILL DISCUSS LATER.

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B1. THE RECRUITING PHASE. WHAT IS RECRUITMENT? IT IS FINDING POTENTIAL JOB APPLICANTS, INFORMING www.a2zmba.com THEM ABOUT THE COMPANY, & GETTING

SM / BU / M2 1/7- 12

THE RECRUITMENT PROCESS HAS FOLLOWING STEPS. CONDUCT JOB ANALYSIS. IT INCLUDES (A) ENVIRONMENT OF THE JOB LIKE NATURE OF CUSTOMER & COMPETITION, SKILLS / KNOWLEDGE REQD., (B) DUTIES & RESPONSIBILITIES. PREPARE A JOB DESCRIPTION. OUTCOME OF JOB ANALYSIS IS JOB DESCRIPTION. IT IS A WRITTEN STATEMENT COVERING (A) JOB OBJECTIVES, (B) DUTIES & RESPONSIBILITIES, (C) PERFORMANCE CRITERIA / STANDARDS, www.a2zmba.com (D) REPORTING RELATIONSHIP.

SM / BU / M2 1/8- 12

DEVELOP JOB QUALIFICATIONS / SPECIFICATIONS. THIS COMES OUT OF JOB DESCRIPTION. IT INCLUDES: EDUCATION, EXPERIENCE, PERSONALITY TRAITS, INTELLIGENCE (MENTAL ABILITY), & PHYSICAL ABILITY.

ATTRACT APPLICANTS / SOURCES OF RECRUITS (SALES PEOPLE):

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SM / BU / M2 1/9- 12

(a) INTERNAL SOURCES (WITHIN THE COMPANY). EMPLOYEES FROM OTHER DEPTS. (TRANSFERS, PROMOTIONS), ACQUAINTANCES OF EMPLOYEES

(b) EXTERNAL SOURCES : WALK-INS, EMPLOYMENT AGENCIES, ADVERTISEMENT IN NEWSPAPERS / MAGAZINES, EDUCATIONAL INSTITUTIONS, THE INTERNET, COMPETITORS SALES PERSONS.
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SM / BU / M2 1/10- 12

B2. THE SELECTION PHASE

SELECTION IS A PROCESS OF SELECTING THE BEST AVAILABLE PERSON FOR THE JOB. IT IS A MULTIPLE STEP PROCESS, WHERE SCREENING TAKES PLACE AT EACH OF THE FOLLOWING STEPS.

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SM / BU / M2 1/11- 12

B3. HIRING & ASSIMILATION (SOCIALIZATION) PHASE

HIRING (EMPLOYING). SALES MANAGERS MUST KNOW COSTS AND BENEFITS OF HIRING. MORE TIME & COST SPENT IN RECRUITMENT & SELECTION CAN BE OUTWEIGHED BY BENEFITS OF HIRING SUCCESSFUL SALES PERSON.

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SM / BU / M2 1/12- 12

ASSIMILATION / SOCIALIZATION IS THE PROCESS BY WHICH THE SALES PEOPLE LEARN SALES CULTURE & BEHAVIORS APPROPRIATE IN THE FIRM. THERE ARE TWO LEVELS OF SOCIALIZATION: 1. INITIAL SOCIALIZATION THAT OCCURS DURING RECRUITING, SELECTION, & INITIAL ORIENTATION / TRAINING. 2. EXTENDED SOCIALIZATION INCLUDES LONG TERM TRAINING, JOB ROTATION, & CORPORATE SOCIAL ACTIVITIES.

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SM / BU / M2 2/1-10

1.0. TRAINING THE SALES FORCE

1.1. TRAINING ASSESSMENT, 1.2. DESIGNING & IMPLEMENTING TRAINING PROGRAMMES 1.3. EVALUATION OF TRAINING PROGRAMMES 1.4. REFRESHER TRAINING.

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1.1. TRAINING ASSESSMENT IT INCLUDES TRAINING NEEDS ASSESSMENT OF 2 GROUPS: (A) ASSESSING INITIAL TRAINING NEEDS OF NEW SALES PEOPLE, (B) ASSESSING CONTINUING TRAINING NEED OF EXPERIENCED SALES PEOPLE
(A) FOR ASSESSING INITIAL TRAINING NEEDS, MANAGEMENT. MUST ANALYSE 2 FACTORS: (I) JOB DESCRIPTION OF THE SALES PERSON. (II) MARKETING STRATEGIES OF THE www.a2zmba.com COMPANY.

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SM / BU / M2 2/3- 10

(B) FOR ASSESSING CONTINUING TRAINING NEEDS, FACTORS TO BE ANALYSED ARE: (i) PERFORMANCE ANALYSIS OF THE SALES PERSON. (ii) CHANGES IN PRODUCTS & MARKET.

1.2. DESIGNING &IMPLEMENTING TRAINING PROGRAMME FOR THIS, ACMEE (AIMS, CONTENT, METHOD, EXECUTION (IMPLEMENTATION), & EVALUATION) DECISIONS ARE TO BE MADE.
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SM / BU / M2 2/4- 10

(i) AIMS / OBJECTIVES OF TRAINING. GENERAL OBJECTIVE IS TO IMPROVE THE PERFORMANCE OF THE SALES FORCE. SPECIFIC AIMS OF INITIAL & CONTINUING TRAINING WILL BE BASED ON TRAINING NEED ASSESSMENT.

(ii) CONTENTS OF TRAINING PROGRAMME. DEPENDS ON SPECIFIC AIMS.

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(A) FOR INITIAL TRAINING OF NEW SALES PERSONS, IT SHOULD COVER ALL KEY AREAS OF SALES PERSONS JOB, LIKE: COMPANY KNOWLEDGE, PRODUCT KNOWLEDGE, MARKET KNOWLEDGE, SELLING TECHNIQUES & PROCESS.

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(B) FOR CONTINUING TRAINING, THE CONTENTS WILL BE ON SPECIFIC ASPECT OF THE JOB, DEPENDING ON CHANGES IN PRODUCT / MARKET, OR DEFICIENCIES OF SALES PERSONS.www.a2zmba.com

SM / BU / M2 2/6- 10

(iii) METHODS OF TRAINING DEPEND ON THE CONTENT & IF GROUP / INDIVIDUAL TRAINING, GROUP METHODS ARE : LECTURES, CASE DISCUSSIONS, GROUP DISCUSSIONS & PRESENTATIONS, ROLE PLAYING, FILMS ON SELLING, VIDEOTAPES, CD-ROMS, PRODUCT DEMONSTRATION. INDIVIDUAL METHODS ARE: ON THE JOB TRAINING, COUNSELLING, CORRESPONDENCE COURSE, SELF STUDY SYSTEM, INDIVIDUAL PRESENTATION, PRODUCT DEMONSTRATION. www.a2zmba.com

SM / BU / M2 2/7- 10

(iv) EXECUTION / IMPLEMENTATION OF TRAINING PROGRAMME. FOLLOWING QUESTIONS NEED TO BE ANSWERED : WHO WILL BE THE TRAINEES? WHO WILL DO THE TRAINING? (OUTSIDE / INSIDE TRAINERS) WHAT ARE THE SUBJECTS, DURATION, & METHODS? WHEN & HOW LONG WILL TRAINING TAKE PLACE? WHERE WILL BE THE PLACE OF TRAINING? WHAT INSTRUCTION MATERIALS ARE NEEDED? WHAT KIND OF TRAINING AIDS ARE REQUIRED? WHAT IS THE TIME TABLE OF THE PROGRAMME? www.a2zmba.com

SM / BU / M2 2/8- 10

1./3. EVALUATION OF TRAINING PROGRAMMES. IT INVOLVES THE FOLLOWING: WHAT SHOULD BE MEASURED INFORMATION COLLECTION METHODS QUSTIONNARIE , OR FOCUS GROUP TESTS METHODS USED FOR MEASURE-MENT AFTER ONLY.

REACTIONS OF PARTICIPANTS.
WHAT KNOWLEDGE, SKILLS, ATTITUDES LEARNT.

BEFORE & AFTER

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CHANGE IN BEHAVIOR

QUSTIONNAIRE , OR OBSERVATION COMPANY DATA

BEFORE & AFTER WITH CONTROL GROUP BEFORE & AFTER WITH CONTROL GROUP

RESULTS CHANGE IN PERFORMANCE OF SALES, EXPENSES.

ANALYSE DATA, DRAW CONCLUSIONS, GIVE RECOMMENDATIONS

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SM / BU / M2 2/10- 10

1.4. REFRESHER TRAINING. IT INCLUDES : (a) CONTINUING TRAINING FOR EXISTING SALES PERSONS, TO DO THEIR JOB BETTER, OR OVERCOME DEFICIENCIES. (b) RETRAINING EXISTING SALES FORCE DUE TO PROMOTIONS, CHANGES IN JOB REQUIREMENTS / DESCRIPTIONS. (c) MANAGERIAL TRAINING FOR IMPROVING EFFECTIVENESS. DONE BY IIMS, TRAINING COMPANIES, PRIVATE CONSULTANTS. IT ALSO INTRODUCES NEW APPROACHES TO SALES MANAGERS. www.a2zmba.com

SM / BU / M2 3/1-10

3.0. DIRECTING THE SALES FORCE

3.1. OBJECTIVES AND CRITERIA FOR TERRITORY FORMATION. 3.2 SALES TERRITORIES DESIGN. 3.3 TIME MANAGEMENT, ROUTING & SCHEDULING.
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SM / BU / M2 3/2-10

3.1 OBJECTIVES & CRITERIA FOR TERRITORY FORMATION

MAJOR OBJECTIVES / REASONS ARE: (a) EFFECTIVE MARKET COVERAGE. (b) REDUCE SELLING EXPENSES. (c) IMPROVE CUSTOMER RELATIONS. (d) BETTER SALES FORCE EVALUATION. (e) IMPROVED SALES FORCE MOTIVATION.
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SM / BU / M2 3/3-10

3.2. SALES TERRITORY DESIGN

THE PROCEDURE / STEPS ARE: (a) SELECT A CONTROL UNIT. (b) DETERMINE LOCATION,POTENTIAL OF CUSTOMERS & CONTROL UNITS. (c) DETERMINE BASIC TERRITORIES BY COMBINING CONTROL UNITS. (d) ASSIGN SALES PERSONS TO TERRITORIES.
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3.3.1. TIME MANAGEMENT

IN ADDITION TO ROUTING & SCHEDULING, THE FOLLOWING STEPS HELP IN EFFICIENT TIME MANAGEMENT: DECIDE SALES PERSONS MAIN TASKS / ACTIVITIES AND TIME ALLOCATIONS. CARRY ACTIVITY ANALYSIS, FOR 1-2 WEEKS. DEVELOP SALES CALL PLAN.
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RECORD ACTUAL TIME SPENT ON VARIOUS ACTIVITIES. REVIEW ONCE A WEEK & TAKE CORRECTIVE ACTIONS.

TIME MANAGEMENT TOOLS: MOBILE PHONES, LAPTOP COMPUTERS (FOR PLANNING, EXECUTING & REPORTING), AND TWO / FOUR WHEELERS.
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3.3.2. ROUTING
IT IS FINDING / LOCATING CUSTOMERS ON A MAP & DECIDING OPTIMAL ROUTE THE SALES PERSON SHOULD TAKE TO VISIT CUSTOMERS. REASONS / IMPORTANCE OF ROUTING. (a) SALES PERSONS SPEND 1/3 OF WORKING HOURS IN TRAVELING. CRITICAL FACTOR IS TRAVEL TIME. (b) ROUTING IS VERY IMPORTANT IF PRODUCT / SERVICE REQUIRES FREQUENT VISITS & SERVICING (E. G. DRIVER CUM SALES PERSONS FOR MILK, BREAD, NEWS www.a2zmba.com PAPERS, ETC)

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PROCEDURE FOR WORKING A ROUTING PLAN

(i) OBTAIN A LARGE MAP. MOUNT THE MAP ON CORKBOARD/FOAM BOARD (ii) PLACE MAP PINS OF DIFFERENT COLOURS FOR DIFFERENT CLASS OF PRESENT CUSTOMERS (A, B, C) & HOT PROSPECTS. DECIDE CALL FREQUENCIES. (iii) ESTABLISH ROUTES WITH/WITHOUT COMPUTER APPLICATION. www.a2zmba.com

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SOME OF THE COMMON ROUTING PATTERNS ARE :

BASE

BASE

CIRCULAR
BASE

CLOVER - LEAF
1 CALL
WORK BACK
st

STRAIGHT LINE / HOPSCOTCH www.a2zmba.com

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AIMS OF ROUTING & SCHEDULING ARE:

(a) IMPROVE SALES TERRITORY COVERAGE. (b) MINIMIZE WASTED TIME / EFFICIENT TIME MANAGEMENT. (c) IMPROVE PRODUCTIVITY (d) MINIMIZE COSTS.
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SCHEDULING IS EFFECTIVE ALLOCATION OF TIME. IT INCLUDES SPECIFIC TIME (DAY & HOUR) AT WHICH A SALES PERSON WILL BE AT A CUSTOMERS PLACE. IT ALSO INCLUDES: (i) TIME TO BE SPENT ON MAIN ACTIVITIES (ii) FREQUENCY OF VISITS TO A, B, C CUSTOMERS. (iii) TIME TO BE SPENT ON EXISTING & PROSPECTIVE CUSTOMERS, AND ON NEW & OLD PRODUCTS.
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4.0. SALES QUOTAS.

A SALES QUOTA IS A SPECIFIC SALES GOAL, OR A PERFORMANCE GOAL FOR A SPECIFIC TIME PERIED, SET FOR A MARKETING UNIT, LIKE A BRANCH, TERRITORY, SALES PERSON, INTERMEDIARY.

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4.1 PURPOSES / OBJECTIVES OF SALES QUOTA (a) TO PROVIDE PERFORMANCE STANDARDS / GOALS. (b) TO CONTROL EXPENSES, SALES, PROFITS & ACTIVITIES OF SALES FORCE. (c) TO MOTIVATE SALES FORCE. (d) TO IDENTIFY STRONG & WEAK POINTS
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4.2. TYPES OF SALES QUOTAS

(a) SALES VOLUME QUOTAS (b) EXPENSE QUOTAS (c) GROSS MARGIN / NET PROFIT QUOTAS (d) ACTIVITY QUOTAS (e) COMBINATION QUOTAS

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4.3. ADMINISTRATION OF QUOTAS

FOLLOWING ACTIONS ARE NEEDED TO MAKE SALES QUOTAS ADMINISTERED PROPERLY & SKILLFULLY (a) SET REALISTIC QUOTAS THAT ARE BASED ON MARKET POTENTIAL. (b) INVOLVE SALES PERSONS IN QUOTA SETTING.
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(c) SALES SUPERVISORS SHOULD REGULARLY INFORM SALES PERSONS ON THEIR ACTUAL PERFORMANCE AGAINST QUOTAS. (d) PERFORMANCE CONTROL SHOULD BE DONE BY REVIEWING SALES FORCE PERFORMANCE & TAKING CORRECTIVE ACTIONS, ON CONTINUOUS BASIS.
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5.0. SALES FORCE COMPENSATION

5.1. OBJECTIVES OF A COMPENSATION PLAN. 5.2. DEVELOPING THE COMPENSATION PLANS - BASIC & COMBINATION. 5.3. TRENDS IN COMPENSATION PLAN.

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5.1. OBJECTIVES OF A COMPENSATION PLAN.

A FIRM SHOULD DECIDE WHICH GENERAL & SPECIFIC OBJECTIVES IT WANTS TO ACHIEVE THROUGH THE COMPENSATION PLAN. SOME OF THEM ARE: ATTRACTING, MOTIVATING & RETAINING GOOD SALES PERSONS (GENERAL) ACHIEVING SALES & GROSS MARGINS (GENERAL) DEVELOPING NEW CUSTOMERS (SPECIFIC) INTRODUCING NEW PRODUCTS (SPECIFIC) www.a2zmba.com

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5.2. BASIC COMPENSATION PLANS ARE:

(A) STRAIGHT SALARY: ADVANTAGES : (I) INCOME STABILITY; (II) NON SELLING ACTIVITIES ARE DONE; (III) FLEXIBILITY; (IV) SIMPLE.
DISADVANTAGES : NO INCENTIVE FOR EXTRA EFFORTS; MAY LEAD TO AVERAGE PERFORMANCE www.a2zmba.com

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(B) STRAIGHT COMMISSION ADVANTAGES: (I) ATTRACTS HIGH PERFORMERS; (II) LESS SUPERVISION, (III)SELLING COSTS CONTROLLED

DISADVANTAGES : NON SELLING ACTIVITIES ARE NEGLECTED; FOCUS ON SALES & NOT ON PROFITABLE SALES.
(C) COMBINATION OF (A) & (B) PLAN IT COMBINES ADVANTAGES & MINIMIZES DISADVANTAGES.www.a2zmba.com

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(C) TRENDS IN COMPENSATION PLANS

25% COMPANIES USE STRAIGHT SALARY OR STRAIGHT COMMISSION PLANS. 75% FIRMS USE COMBINATION PLAN, THOUGH SALARY TO INCENTIVES RATIO VARIES. FIXED SALARY VARIES 60 TO 80% VARIABLE PORTION IS LINKED TO STRATEGIC OBJECTIVES - CUSTOMER SATISFACTION INDEX, CUSTOMER RETENTION. www.a2zmba.com

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6.0. MOTIVATING THE SALES FORCE

6.1. 6.2. 6.3. 6.4. WHAT IS MOTIVATION ? IMPORTANCE OF MOTIVATION. BEHAVIOURAL CONCEPTS SELECTION OF MOTIVATIONAL TOOLS. 6.5. CHALLENGES IN SALES FORCE MOTIVATION.
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6.1. WHAT IS MOTIVATION?

A PERSON HAS MANY NEEDS. WHEN A NEED IS AROUSED TO A SUFFICIENT INTENSITY, IT BECOMES A MOTIVE, WHICH DRIVES THE PERSON TO ACT. IN A SALES SITUATION, MOTIVATION IS THE DEGREE OF EFFORTS THE SALESPERSON SPENDS TO COMPLETE VARIOUS ACTIVITIES OF THE SALES JOB.
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6.2 . IMPORTANCE OF MOTIVATION.

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MOTIVATING SALESPEOPLE IS IMPORTANT & DIFFICULT BECAUSE OF: UNIQUE NATURE OF SALES JOB. INDIVIDUALITY OF SALESPERSONS. VARIED & CONFLICTING SALES GOALS. CHANGING MARKETING ENVIRONMENT.

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6.3. BEHAVIOURAL CONCEPTS

BEFORE DEVELOPING MOTIVATIONAL MIX, SALES MANAGER MUST UNDERSTAND SOME OF MOTIVATIONAL THEORIES. MASLOWS HIERARCHY OF NEEDS, HERTZBERGS DUAL FACTOR THEORY, EXPECTANCY THEORY, ROLE THEORY, CHURCHILL, FORD, WALKER MODEL
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6.4. SELECTION OF MOTIVATIONAL TOOLS

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BEFORE SELECTING MOTIVATIONAL TOOLS / MIX, UNDERSTAND : (i) SPECIFIC NEEDS OF EACH SALES PERSON. (ii) PERFORMANCE CRITERIA OF SALES PERSONS.

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MOTIVATIONAL TOOLS / MIX CONSISTS OF THE FOLLOWING ELEMENTS / COMPONENTS : (A) BASIC COMPENSATION PLAN, INCLUDING SALARY, COMMISSIONS, AND FRINGE BENEFITS.

(B) SPECIAL FINANCIAL INCENTIVES, CONSISTING SALES CONTESTS, BONUS PAYMENTS.

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(C) NON FINANCIAL REWARDS: PROMOTION (MAY INCLUDE FIN. REWARD) RECOGNITION CHALLENGING ASSIGNMENTS.

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(D) ADDITIONAL MOTIVATIONAL TOOLS: SALES TRAINING SALES MEETINGS EFFECTIVE SUPERVISION & LEADERSHIP PERFORMANCE EVALUATION www.a2zmba.com CORPORATE / SALES CULTURE.

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6.5. CHALLEGES IN SALES FORCE MOTIVATION

(A) HOW TO IMPROVE THE PERFORMANCE OF PLATEAUED SALESPERSON? (C) HOW CAN ONE MOTIVATIONAL PROGRAMME MOTIVATE ALL SALESPERSONS?

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7.0 SALES LEADERSHIP

7.1 WHAT IS SALES LEADERSHIP? 7.2 SALES LEADERSHIP ROLES. 7.3 SALES LEADERSHIP SKILLS. 7.4 SALES LEADERSHIP STYLES.

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7.1 WHAT IS SALES LEADERSHIP?

LEADERSHIP IS A PROCESS IN WHICH ONE PERSON INFLUENCES OTHER PEOPLE S BEHAVIOR FOR ACHIEVING SPECIFIC GOALS. MANAGEMENT IS MAINLY LEARNED / LEARNING PROCESS, LEADERSHIP IS MAINLY EMOTIONAL PROCESS. LEADERSHIP IS NECESSARY FOR A SALES MANAGERS EFFECTIVENESS.
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7.2 SALES LEADERSHIP ROLES

A SALES MANAGER HAS MULTI FACETED ROLES LIKE RECRUITING, SELECTING, TRAINING, MOTIVATING, EVALUATING & CONTROLLING THE SALES FORCE. REPRESENTING THE FIRM TO VARIOUS OUTSIDE AGENCIES. INTERACTIONS WITH SUPERIORS, PEERS & SUBORDINATES
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7.3 SALES LEADERSHIP SKILLS

COMMUNICATION & LISTENING. PROBLEM SOLVING SKILLS. INTERPERSONAL SKILLS (GOOD WORKING RELATIONSHIP) PERSUASIVE SKILLS (NOT THREATENING / COERCING)
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7.4 SALES LEADERSHIP STYLES

LEADERSHIP STYLE IS HOW A MANAGER BEHAVES. BROADLY, TWO STYLES OF LEADERSHIP: TRANSACTIONAL & TRANSFORMATIONAL (A) TRANSACTIONAL LEADERSHIP. IT DEALS WITH SUPERVISION IN 2 WAYS: (i) VERBAL FEEDBACK IN THE FORM OF REWARDS & PUNISHMENT. (ii) TASK ORIENTATION ON GETTING JOB DONE. BOTH HAVE SHORT-TERM FOCUS, & ONE WAY COMMUNICATION ON WHAT, HOW, WHEN & WHERE TO DO. www.a2zmba.com

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(B) TRANSFORMATIONAL LEADERSHIP. IT TRANSFORMS THE BASIC VALUES, BELIEFS, & ATTITUDES OF FOLLOWERS, WHO PERFORM BEYOND EXPECTATIONS. SUCH LEADERS ARE CALLED CHARISMATIC.

THEY ARE PROACTIVE, LISTEN & CARE FOR FOLLOWERS, USE 2-WAY COMMUNICATION.
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4. TYPES OF TRANSFORMATION LEADERSHIP BEHAVIOUR:

(i) ARTICULATE A VISION, (ii) COMMON GOALS ARE COMMUNICATED, (iii) LEAD BY EXAMPLE / ROLE MODELS, (iv) GIVE INDIVIDUALISED SUPPORT.
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SITUATIONAL LEADERSHIP
A GOOD SALES MANAGER SHOULD BE A SITUATIONAL LEADER-I.E. ABILITY TO TAILOR /ADJUST LEADERSHIP STYLE TO THE NEEDS OF THE CURRENT SITUATION & INDIVIDUAL SALESPERSON.
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TOOLS & TECHNIQUES OF SUPERVISION / LEADERSHIP

SUPERVISION IS A PART OF LEADERSHIP, CONSISTING OF DIRECTING / OVERSEEING DAILY ACTIVITIES OF SALES PEOPLE. TO BE EFFECTIVE, A SALES MANAGER USES MANY TOOLS & TECHNIQUES TO INTERACT WITH SALES PEOPLE. THESE ARE: DIRECT AND INDIRECT METHODS. DIRECT METHODS: TELEPHONE, E-MAIL, COMPUTER-BASED, SUPPORT METHODS, SALES MEETINGS, VISITING WITH SALES PERSONS. INDIRECT METHODS: SALES REPORTS, EXPENSE REPORTS, COMPENSATION PLANS, SALES ANALYSIS REPORTS. www.a2zmba.com

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SALES FORCE MORALE

MORALE IS MENTAL & EMOTIONAL ATTITUDES OF A PERSON TO THE ENVIRONMENT, INCLUDING FAMILY, EMPLOYER, SOCIETY.
A SALES MANAGER DEALSES WITH INDIVIDUAL & GROUP MORALE.
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(A) FACTORS/CAUSES OF POOR MORALE (I) WORK RELATED. LACK OF COMMUNICATION, STATUS IN THE COMPANY, TREATMENT, WORKING CONDITION, RECOGNITION, COMPENSATION PLAN, NATURE OF JOB, JOB-SECURITY, PROMOTIONS, TERRITORY ALLOCATION, SALES QUOTAS, REPORTS. (II) PERSONAL FACTORS. FINANCIAL PROBLEMS, POOR HEALTH, DOMESTIC REASONS.
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(B)ACTIONS FOR FINDING CAUSES OF POOR MORALE: INFORMAL / FORMAL COUNSELLING, SATISFACTION SURVEYS, EXIT INTERVIEWS, CLOSE RELATIONSHIPS. (C) EFFECTS OF LOW MORALE SALES PERFORMANCE, TURNOVER OF PEOPLE, MINOR PROBLEMS ARE MAGNIFIED, EXPENSES INCREASE, UNIONISATION. (D) MORALE BUILDING PROCESS INTEGRATE PERSONS OBJECTIVES / INTERESTS WITH THAT OF THE FIRMS FROM HIRING STAGE. www.a2zmba.com

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CONTROLLING & EVALUATING THE SALES FORCE 8.1 SALES ANALYSIS 8.2 MARKETING COST (& PROFITABILITY) ANALYSIS 8.3 SALES FORCE PRODUCTIVITY 8.4 NATURE & IMPORTANCE OF PERFORMANCE EVALUATION. 8.5 CONTROLLING THE SALES FORCE.
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8.1 SALES ANALYSIS

IT INCLUDES MEASURING AND EVALUATING ACTUAL SALES IN COMPARISON TO SALES QUOTAS (GOALS). THE MAJOR USE FOR SALES ANALYSIS IS TO DETECT STRENGTHS &WEAKNESSES IN SALES EFFORT. TWO METHODS / TOOLS ARE USED FOR SALES ANALYSIS: (a) SALES VARIANCE ANALYSIS (b) MICRO SALES ANALYSIS
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(A) SALES VARIANCE ANALYSIS

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IT MEASURES CONTRIBUTION OF DIFFERENT FACTORS TO THE GAP BETWEEN ACTUAL PERFORMANCE & SALES GOAL. E.G. : A FIRMS I QUARTER SALES GOAL WAS 1000 MOTORS AT RS. 20,000 PER MOTOR, TOTALLING RS. 2 CRORES. AT I QUARTERS END, ONLY 800 MOTORS WERE SOLD AT RS. 19,000 EACH, FOR SALES REVENUE = RS. 1.52 CRORES. THE SALES VARIANCE WAS 24% HOW MUCH OF SALES PERFORMANCE
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WAS DUE TO PRICE DECLINE AND VOLUME DECLINE? RS. % VARIANCE = (20,000 19,000) = 8,00,000 17 DUE TO (800) PRICE VARIANCE = DUE TO VOLUME (20,000) (1,000-800) = 40,00.000 83

48,00, 000
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100

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MAJOR REASON IS FAILURE TO ACHIEVE VOLUME TARGET. FURTHER ANALYSIS OF SALES VOLUME IS DONE BY MICRO SALES ANALYSIS.

(B) MICRO SALES ANALYSIS

IT ANALYSIS SALES BY TERRITORY, SALES REPS, PRODUCT LINE, & CUSTOMER. TAKING EARLIER EXAMPLE, WE ANALYSE SALES BY TERRITORIES
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TEERITORY QUOTA ACTUAL PERFN INDEX NR 250 200 80 ER 200 190 95 WR 300 170 57 SR 250 240 96

TOTAL = 1,000
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800

80

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SALES MANAGER FOCUSES ON WR & NR. FURTHER ANALYSIS IS DONE BY PRODUCT ITEM, SALES REP., & CUSTOMER TO FIND REASONS & TAKE CORRECTIVE ACTIONS.

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8.2 MARKETING COST & PROFITABILITY ANALYSIS

MARKETING COST ANALYSIS ANALYZES SALES VOLUME & SELLING EXPENSES (OR MARKETING COSTS), IN ORDER TO DETERMINE PROFITABILITY OF TERRITORIES, PRODUCTS, MARKET SEGMENTS & CHANNELS. PURPOSE IS TO MEASURE THE RELATIVE PROFITABILITY OF PARTICULAR ASPECTS OF SALES OPERATIONS. THIS INFORMATION HELPS TO DECIDE WHICH SALES / MARKETING ACTIVITY SHOULD BE www.a2zmba.com EXPANDED, REDUCED, OR ELIMINATED.

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PROCEDURE OF MARKETING COST & PROFITABILITY ANALYSIS IS AS FOLLOWS: STEP 1. IDENTIFY FUNCTIONAL (ACTIVITY) COSTS & CONVERT TRADITIONAL (NATUREAL) EXPENSES TO FUNCTIONAL COSTS.
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FOR EXAMPLE:
NATURAL (TRADITIONAL) COSTS

FUNCTIONAL COSTS TOTAL SELLING ORDER ADVERT- MARKET PROCESS, ISING RESEARCH BILLING, DESPATCH 1,00,000 25,000 50,000 1,75,000 1,00,000 35,000 20,000 1,55,000 3,00,000 90,000 1,00,000 4,90,000

SALARIES RENT SUPPLIERS

10,00,000 3,00,000 2,00,000 15,00,000

5,00,000 1,50,000 30,000 6,80,000

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STEP2. ALLOCATE FUNCTIONAL COSTS TO MARKETING ENTITIES (LIKE TERRITORIES, PRODUCTS, CHANNELS).

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E.G. BASES OF ALLOCATION OF FUNCTIONAL COSTS

FUNCTIONAL COSTS
SELLING

SALES TERRITORES
DIRECT

PRODUCTS
SELLING TIME TO EACH PRODUCT

MARKET SEGMENTS

ADVERTISING M. R. ORDER PROCESSING, BILLING, DESPATCH

DIRECT / MEDIA DIRECT / MEDIA SPACE FOR EACH CIRCULATION PRODUCT TIME SPENT TIME SPENT TIME SPENT NO. OF ORDERS & DESPATCH UNITS.

NO. OF ORDERS NO. OF ORDERS & DESPATCH & DESPATCH UNITS.www.a2zmba.comUNITS.

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STEP 3. PREPARE PROFIT & LOSS STATEMENT FOR EACH MARKETING ENTITY BY USING EITHER (I) FULL COST (OR NET PROFIT) APPROACH, OR (II)CONTRIBUTION MARGIN APPROACH.

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FOR EXAMPLE, USING (II) FOR PRODUCTS (A) & (B)

TOTAL SALES (RS.) VARIABLE COSTS 20 CRORES 12 CRORES 8 CRORES DIRECT FIXED COSTS PROFIT CONTRIN 4 CRORES 4 CRORES PRODUCTS A PRODUCTS B 8 CRORES 5 CRORES 3 CRORES 1.5 CRORES 1.5 CRORES 12 CRORES 7 CRORES 5 CRORES 2.5 CRORES 2.5 CRORES

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TREND IS FOR CONTRIBUTION MARGIN METHOD, AS IT AVOIDS MANAGERIAL CONFUSION CAUSED BY ARBITRARY ALLOCATION OF FIXED & INDIRECT COSTS.

8.3 SALES FORCE PRODUCTIVITY

AS SELLING COSTS ARE GOING UP, FIRMS USE FOLLOWING METHODS TO IMPROVE PRODUCTIVITY
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A. INCREASE SALES, BY EFFECTIVE USE OF PROMOTIONAL TOOLS LIKE MARKETING, ONLINE MARKETING, TRADESHOW B. COST REDUCTIONS, BY HIRING AGENTS ON STRAIGHT COMMISSION, USE INSIDE SALES PERSONS, OUTSIDE SALES PERSONS FOR CRITICAL SELLING ACTIVITIES ONLY. C. ELIMINATE UNPROFITABLE PRODUCTS & TERRITORIES.
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8.4. NATURE & IMPORTANCE OF PERFORMANCE EVALUATION (P.E)

(A) NATURE OF P.E. WHAT IS P.E. & ITS PURPOSE. P.E. & DEVELOPMENT. P.E. & DIRECTION. P.E. & DIFFICULTIES.

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(B) IMPORTANCE OF P.E. HELPS IN INCREMENTS & PROMOTIONS. HELPS IN SALES SUPERVISION. HELPS IN MOTIVATION.

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8.5 CONTROLLING THE SALES FORCE

IT HAS 4 STEPS: (a) ESTABLISH PERFORMANCE STANDARDS. (P.S.) (b) MEASURE ACTUAL PERFORMANCE. (c) EVALUATE PERFORMANCE AGAINST STANDARDS. (d) ANALYSE CAUSES & TAKE CORRECTIVE ACTIONS.
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(A) ESTABLISH P.S.: TWO TYPES I. QUANTITATIVE P.S: SALES VOLUME QUOTA, EXPENSE QUOTA, CALLS PER DAY, MARKET SHARE, ETC. II. QUALITATIVE P.S: (i) JOB FACTORS PRODUCT KNOWLEDGE, CUSTOMER RELATIONSHIP. (ii) PERSONAL FACTORS: PUNCTUALITY, ATTITUDE, COOPERATION.

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(B) MEASURE ACTUAL PERFORMANCE. BASIC SOURCES: (i) SALES (ii) REPORTS.

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(C) ANALYSE CAUSES & TAKE CORRECTIVE ACTIONS.

USE SALES ANALYSIS FOR FINDING CAUSES. IF PERFORMANCE IS GOOD, APPRECIATE / REWARD. IF PERFORMANCE IS UNSATISFACTORY.
(i) COUNSEL / TRAIN SALES PERSONS; OR (ii) MODIFY STRATEGIES / POLICIES; OR (iii) LOWER STANDARDS TO REALISTIC LEVEL.
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THE ENVIRONMENT FOR PERSONAL SELLING MANAGEMENT

(a) SOCIAL & CULTURAL, TECHNOLOGICAL, & COMPETITIVE ENVIRONMENT, (b) UNETHICAL SALES FORCE BEHAVIOUR; (c) SOCIAL RESPONSIBILIGY; (d) LEGISLATION AFFECTING SELLING & SALES MANAGEMENT.
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A-1. SOCIAL & CULTURAL ENVIRONMENT

SOCIOCULTURAL FACTORS ARE VALUES & BELIEFS OF A SOCIETY. THEY VARY IN DIFFERENT SOCIETIES. TO AVOID MISTAKES, A SALES PERSON MUST LEARN ABOUT CUSTOMERS CULTURE, VALUES, GEOGRAPHY, ARTISTS, RELIGION, REGULATIONS, & POLITICAL STRUCTURE. EG. A JAPANESE CUSTOMER WILL BUY A PRODUCT ONLY AFTER A RELATIONSHIP ISwww.a2zmba.com DEVELOPED.

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A-2. TECHNOLOGICAL ENVIRONMENT.

IT INCLUDES INVENTIONS, INNOVATIONS, & ADVANCES IN SCIENTIFIC KNOWLEDGE. SUCH TECHNOLOGICAL ADVANCES HAVE AN IMPACT ON THE JOBS OF SALESPERSONS. EG. USE OF

INTERNET TECHNOLOGY.
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A-3. COMPETITIVE ENVIRONMENT.

COMPETITION INCLUDES MARKETING ACTIVITIES OF COMPETING FIRMS (OR OTHER SUPPLIERS). IN MANY CASES, THIS HAS AN IMPACT ON SALES ORGANIZATION OF A FIRM. EG. WORKLOAD OF SALESPERSONS MAY GO UP DUE TO COMPETITION.
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(B) UNETHICAL SALESFORCE BEHAVIOUR.

SALES PEOPLE SHOULD BE ETHICAL IN DEALING WITH THEIR (I) OWN COMPANY, (II) COLLEAGUES, (III) CUSTOMERS, (IV) COMPETITORS.
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(I)

OWN COMPANY. SOME SALESPERSONS HARM THEIR OWN COMPANIES BY MISUSING COMPANY ASSETS, CHEATING IN SALES CONTESTS, FALSE SALES REPORTS. (II) COLLEAGUES / COWORKERS. TAKING AWAY BUSINESS FROM COSALESPEOPLE, UNDERCUTTING COLLEAGUES. (III) CUSTOMERS. OVER PROMISING, DISTORTING TRUTH, BRIBING. (IV) COMPETITORS. SPEAKING BAD, SPYING, DAMAGING PRODUCTS / DISPLAYS. www.a2zmba.com

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(C) SOCIAL RESPONSIBILITY.

IT MEANS A FIRMS MANAGEMENT HAS A RESPONSIBILITY, (IN ADDITION TO COMPANYS INTEREST), TOWARDS THE WELFARE & INTEREST OF THE SOCIETY. A FIRM HAS 4 RESPONSIBILITIES TO ITS STAKEHOLDERS : ECONOMIC, LEGAL, ETHICAL, & DISCRETIONARY.

ECONOMIC RESPONSIBILITIES. TO MAXIMIZE PROFITS BY PRODUCING & MARKETING GOODS / SERVICES THAT SOCIETY WANTS.www.a2zmba.com

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LEGAL RESPONSIBILITIES. ECONOMIC GOALS TO BE ACHIEVED WITHIN LEGAL FRAMEWORK IMPOSED BY STATE / CENTRAL GOVTS. ETHICAL RESPONSIBILITIES. INCLUDE ACTING WITH FAIRNESS & IMPARTIALITY. UNETHICAL BEHAVIOUR OCCURS WHEN A COMPANY / INDIVIDUAL GAIN AT THE EXPENSE OF SOCIETY. DISCRETIONARY RESPONSIBILITIES. ARE VOLUNTARY & GUIDED BY DESIRE TO MAKE SOCIAL CONTRIBUTIONS.
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(D) LEGISLATION AFFECTING SELLING & SALES MANAGEMENT.

SALES DEPT. ACTIVITIES CAN HAVE LEGAL IMPLICATIONS. SALES MANAGERS NEED TO KNOW & COMMUNICATE WITH LEGAL OFFICERS OF THE FIRM / LAWERS ON MATTERS LIKE PRICING & RELATIONS WITH COMPETITORS (AS PRICE CARTELS ARE ILLEGAL), DISPUTES WITH CUSTOMERS (CONSUMER COURTS), & OTHER ISSUES COVERED UNDER VARIOUS STATE / CENTRAL GOVT. LAWS LIKE MRTP, LAW OF CONTRACTS, ETC. SALES MANAGERS SHOULD AVOID COSTLY LITIGATION & UNFAVOURABLE PUBLICITY. www.a2zmba.com

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PERSONAL SELLING PROCESS

THERE IS NO MAGIC FORMULA TO MAKE A SALE. BUT IF A SALESPERSON FOLLOWS BELOW MENTIONED LOGICAL STEPS, IT IMPROVES THE POSSIBILITY OF MAKING A SALE. THESE SELLING (ACTIVITIES) ARE KNOWN AS PERSONAL SELLING PROCESS OR SALES PROCESS. EACH STEP, LIKE A CHAIN, OVERLAPS OTHERS. SEQUENCE OF STEPS CAN BE CHANGED DEPENDING ON SITUATIONS.
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STEP IN SALES PROCESS ARE:

1. 2. 3. 4. 5. 6. 7. PROSPECTING & QUALIFYING. PREAPPROACH. APPROACH. PRESENTATION. OVERCOMING OBJECTIONS. TRAIL CLOSE / CLOSE. FOLLOW-UP.
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SALES PRESENTATION METHODS

OUT OF MANY METHODS, WE DISCUSS THE FOLLOWING: (A) STIMULUS RESPONSE METHOD (CANNED APPROACH) (B) FORMULA METHOD (AIDAS APPROACH) (C) NEED SATISFACTION METHOD (FABV/BENEFIT SELLING APPROACH) (D) RELATIONSHIP SELLING (TRANSACTIONAL, VALUE ADDED, PARTNERING APPROACH.)
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BENEFIT SELLING / FABV APPROACH THIS IS CREATIVE FORM OF SELLING. SALES PERSON ASKS PROBING QUESTIONS TO FULLY UNDERSTAND PROSPECTS NEEDS / PROBLEMS. HE THEN SELECTS & PRESENTS FEATURES, ADVANTAGES, BENEFITS, & VALUE THAT WILL SATISFY PROSPECTS NEEDS. FOR EXAMPLE,
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PRODUCT

FEATURE

ADVANTAGE

BENEFIT / VALUE SAVES MONEY

* CEILING FAN

DOUBLE BALL BEARING.

NOISE FREE RUNNING FOR MANY YEARS

* PHOTO COPY MACHINE

SERVICE CENTRE

WITHIN 4-HOURS SERVICE

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SAVES TIME

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RELATIONSHIP SELLING
TRANSA CTIONAL VALUE ADDED PARTENERING / COLLA BORATING

SELLING AIDS: PRODUCT DEMONSTRATION, AUDIO-VISUAL PRESENTATION KIT (LAPTOP WITH GRAPHICS & MULTI-MEDIA PROJECTOR), LEAFLETS, ETC.
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