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.

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.
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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 HAVE www.a2zmba.com
MORE RESPONSIBILITES.

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30

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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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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MARKETING TEAM HAS 2 GROUPS :

(A) FIELD SALES FORCE ;
(B) H.Q. MARKETING TEAM.
M A R K E T IN G H E A D

SA LES
M ANAGER

ASM
(N )

ASM
(E )

ASM
(W )

M ANAGER
P R O M O T IO N

ASM
(S )

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M .R.
M ANAGER

M ANAGER
S E R V IC E S

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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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2.1. CAREER PATH IN SM.

SALES
T R A IN E E /
R E P.

SALES /
M A R K E T IN G
E X E C U T IV E

AREA /BR./
R EG. SA LES
M ANAGER

N A T IO N A L
SA LES
M ANAGER

GM /VP
M A R K E T IN G

CEO /M D /
P R E S ID E N T
(3 1 % )

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
www.a2zmba.com
MARKETING ORIENTATION.

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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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SM / BU / M1 11/ 30

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.
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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.
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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.
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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 &
OPERATIONAL PLANS
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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 FOR

BETTER CONFIDENCE.
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3.5. SALES FORECASTING METHODS

ARE CLASSIFIED AS
(A) QUALITATIVE, (B) QUANTITATIVE TECHNIQUES.
E X E C U T IV E O P E N IO N .
O P E N IO N /
JU D G E M E N T
M ETHODS

E X P E R T O P E N IO N / D E L P H I
M ETHOD
C O M P O S IT E O F S A L E S F O R C E .
O P E N IO N .

Q U A L IT A T IV E
T E C H N IQ U E S

C O U N T IN G
M ETHODS
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SU RV EY O F BU Y ERS
IN T E N T IO N S .
T E S T M A R K E T IN G /
M A R K E T T E S T IN G

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D E C O M P O S IT IO N
T IM E S E R IE S
M ETHODS

M O V IN G A V E R A G E S
E X P O N E N T IA L S M O O T H IN G
B O X - JE N K IN S

Q U A N T IT A T IV E
T E C H N IQ U E S

CAUSAL /
A S S O C IA T IO N
M ETHODS
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C O R R E L A T IO N / R E G R E S S IO N
A N A LY S IS .
E C O N O M E T R IC M O D E L S .
IN P U T / O U T P U T M O D E L S .

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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 &
COMMUNICATIONwww.a2zmba.com

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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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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.
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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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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.
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(1 ) L IN E S A L E S O R G A N IS A T IO N .
L IN E A U
PERSO N
CO N TRO
SU BO RD

T H O R IT Y
C A N D IR E C T &
L IM M E D IA T E
IN A T E S .

SM / BU / M1 23/ 30

V. P. / G. M .
SALES M G R

AR EA SALES
M A NAG ER - 1

AR EA SALES
M ANAG ER - 2

AR EA SA LES
M ANAG ER - 3

A SST.SA LES
M G R - H .Q .

SALES PEO PLE

SALES PEO PLE

SALES PEO PLE

O F F IC E S T A F F

A D VA N TA G E S : U SEFU L FO R
S M A L L F IR M S , S IM P L E , C L E A R
A U T H O R IT Y , L E S S C O S T .

D IS A D VA N T A G E S : N O T P R O P E R
F O R L A R G E O R G N S ., A S L I N E ,
M G R S A C T IV IT IE S IN C R E A S E ,
M A K IN G T H E M IN E F F E C T IV E .
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(2 ) L IN E & S T A F F S A L E S O R G A N IS A T IO N .
S T A F F A U T H O R IY
P E R S O N C A N A D V IS E /
REECO M M EN D .
M K T. SE R V. M G R

V. P. M A R K E T IN G

SALES M G R .

M .R.M G R.

AD /SP M G R.

R EG./ BR .SALES M G R S.
SALES PERSO NS.

A D VA N TA G E S :
B E T T E R M K T . D E C IS IO N S .
B E T T E R S A L E S P E R F O R M C E .
U S E F U L F O R M E D . / L A R G E F IR M S

D IS A D VA N T A G E S :
C O N F L IC T / C O N F U S IO N , IF
A U T H O R IT Y IS N O T C L E A R .
C O R D IN A T IO N / C O N T R O L W O R K
& C O S T M A Y IN C R E A S E .

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(3 ) F U N C T IO N A L S A L E S O R G N .
F U N C T IO N A L
S P E C I A L I S T S .*

M . R . M G R .*

SM / BU / M1 25/ 30

V. P. M A R K E T IN G

A D . / S .P . M G R *

S A L E S M G R .*

S E R V I C E M G R .*

SALES PEO PLE

A D VA N TA G E S :
S IM P L E T O A D M IN IS T E R
A L L F U N C T IO N A L M A N A G E R S
G IV E N L IN E A U T H O R IT Y .
Q U A L IF IE D S P E C IA L IS T S G U ID E
S A L E S P E R S O N S .

D IS A D VA N T A G E S :
C O N F U S IN G A S S A L E S P E O P L E
H A V E M A N Y B O S S E S .
C O O R D I N A T IO N A T V .P . L E V E L .
C O S T L Y F O R S M A L L / M E D .
F IR M S .
L E S S E F F E C T IV E , IF P R O D U C T S &
M A R K E T S IN C R E A S E .

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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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S M / B U / M 1 - 2 7 /3 0

(i) G E O G R A P H I C S P E C I A L I S A T I O N
F O R A L A R G E C O M PA N Y , S E L L IN G IN
N A T IO N A L M A R K E T . L IM IT E D P R O D U C T S ,
& M A R K E T S E G M E N T S .

V . P . (M

K T G )

A D V . &
S .P .
M G R
N . R .
S A L E S
M G R .

E .R .
S A L E S
M G R .

W .R .
S A L E S
M G R .

S .R .
S A L E S
M G R .

B R A N C H
S A L E S
M G R S .

B R A N C H
S A L E S
M G R S .

B R A N C H
S A L E S
M G R S .

B R A N C H
S A L E S
M G R S .

S A L E S
P E O P L E

S A L E S
P E O P L E

S A L E S
P E O P L E

S A L E S
P E O P L E

A D VA N TA G E S :
(a ) S U P E R IO R C U S T O M E R S E R V IC E ,
(b ) L O C A L P R O B L E M S O L V IN G - S P E E D IL Y ,
(C ) B E T T E R S A L E S F O R C E C O N T R O L & M A R K E T
C O V E R A G E .
D IS A D V A N T A G E S : (x ) H IG H E R C O S T S ,
( y ) M O R E C O O R D I Nwww.a2zmba.com
A T IO N N E E D E D .

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(ii) P R O D U C T / B R A N D S P E C I A L I S A T I O N .
N E E D E D W H E N
(a ) L A R G E N o . O F P R O D U C T S / B R A N D S ,
(b ) T E C H . & N O N -T E C H . P R O D U C T S ,
(c ) D IF F E R E N T P R O D U C T S T O D IF F E R E N T
C U S T O M E R S .

G. M . SA L E S
R M -N R

R M -E R

R M -W R

R M -S R

A S M P D 1

A S M P D 2

A S M P D 3

A S M P D 4

S A L E S
P E R S O N S

S A L E S
P E R S O N S

S A L E S
P E R S O N S

S A L E S
PE R S O N S

A D
(a )
(b )
(c )

VA N TA G E S :
C L O S E A T T E N T IO N T O E A C H P R O D U C T ,
Q U IC K R E S P O N S E ,
E F F E C T IV E M A R K E T IN G - M IX .

D IS A D VA N T A G E S :
(x ) M O R E C O S T S ,
(y ) C U S T O M E R IR R IT A T IO N , B E C A U S E T W O O R
M O R E S A L E S P E R S O N S C A L L IN G O N ,
(z) P R O D U C T / B R A N D M A N A G E R S N O T G IV E N
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E N O U G H A U T H O R IT Y .

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(iii) C U S T O M E R / M A R K E T M G T . O R G .
N E E D E D W H E N S IM IL A R P R O D U C T S A R E
M A R K E T E D T O D IF F E R E N T T Y P E S O F
C U STO M ER S / M A R K ETS.

V .P . ( M K T G )
R M -N R

R M -E R

R M M D EA LER

R M M IN D U S .

SA LES
PER SO N S

SA LES
PER SO N S

R M -W R
R M M G O V T.

PER SO N
N E L -M

R M -S R
A C C O U -N T S -M

SA LES
PER SO N S

A D VA N TA G E S :
(a ) M E E T S C U S T O M E R N E E D S .
( b ) B E C O M E S M A R K E T / C U S T O M E R C E N T R I C .
D IS A D VA N T A G E S :
(x ) M O R E C O S T S .

(iv ) C O M B I N A T I O N O R G N .
L A R G E F IR M W IT H M A N Y P R O D U C T S ,
S E L L IN G T O M A N Y M A R K E T S . A D O P T
(A ) C O R P O R A T E - D IV IS IO N A L O R IG IN A T IO N
(IS S IM IL A R T O P R O D U C T / B R A N D
S P E C IA L IS A T IO N ) O R
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(B ) P R O D U C T - M A R K E T M A T R IX O R G .

S M / B U / M 1 - 3 0 /3 0

D M M s (P R O D U C T M G S )

P R O D U C T -M A R K E T M A T R IX O R G .
R M M s (M A R K E T M G R S )
at N R , E R , W R , SR .
M /C -I
M /C -II
T R A N
SG
L IG .

D M
AT
M A
M U

M s A T FA C T O R IE S , & R M M s A R E
R E G IO N S .
T R IX O R G . N E E D E D F O R
L T IP R O D U C T , M U L T I-M A R K E T F IR M .

www.a2zmba.com

SM / BU / M2 1/1-12

SALES MANAGEMENT MODULE 2 (M2)

MANAGEMENT OF SALES FORCE
INCLUDES:

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, SALES GROWTH, CUSTOMER
SATISFACTION, ETC.
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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
FREQUENCY FOR EACH CLASS.
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SM / BU / M2 1/6- 12

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

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, (D) REPORTING
RELATIONSHIP.
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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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SM / BU / M2 2/2-10

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
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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SM / BU / M2 2/5- 10

(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.

(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.
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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.
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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?
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SM / BU / M2 2/8- 10

1./3. EVALUATION OF TRAINING PROGRAMMES.

IT INVOLVES THE FOLLOWING:
WHAT SHOULD
BE MEASURED

INFORMATION
COLLECTION
METHODS

METHODS
USED FOR
MEASURE-MENT

REACTIONS OF
PARTICIPANTS.

QUSTIONNARIE
, OR FOCUS
GROUP

AFTER ONLY.

WHAT
KNOWLEDGE,
SKILLS,
ATTITUDES
LEARNT.

TESTS

BEFORE &
AFTER

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SM / BU / M2 2/9- 10

CHANGE IN
BEHAVIOR

QUSTIONNAIRE
, OR
OBSERVATION

BEFORE &
AFTER WITH
CONTROL
GROUP

RESULTS
CHANGE IN
PERFORMANCE
OF SALES,
EXPENSES.

COMPANY
DATA

BEFORE &
AFTER WITH
CONTROL
GROUP

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.
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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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SM / BU / M2 3/4-10

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 12 WEEKS.
DEVELOP SALES CALL PLAN.
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SM / BU / M2 3/5-10

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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SM / BU / M2 3/6-10

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 PAPERS,
ETC)
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SM / BU / M2 3/7-10

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.
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SM / BU / M2 3/8-10

SOME OF THE COMMON ROUTING

PATTERNS ARE :
BASE

BASE

C IR C U L A R
BASE

CLO VER - LEAF

1 st C A L L
W O RK BACK

S T R A I G H T L www.a2zmba.com
IN E / H O P S C O T C H

SM / BU / M2 3/9-10

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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SM / BU / M2 3/10-10

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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SM / BU / M2 4/1-5

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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SM / BU / M2 4/2-5

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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SM / BU / M2 4/3-5

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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SM / BU / M2 4/4-5

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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SM / BU / M2 4/5-5

(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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SM / BU / M2 5 1 / 5

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.

SM / BU / M2 5 2 / 5

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)
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SM / BU / M2 5 3 / 5

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
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SM / BU / M2 5 4 / 5

(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.
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SM / BU / M2 5 5 / 5

(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
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RETENTION.

SM / BU / M2 6 1 / 8

6.0. MOTIVATING THE SALES

FORCE
6.1. WHAT IS MOTIVATION ?
6.2. IMPORTANCE OF MOTIVATION.
6.3. BEHAVIOURAL CONCEPTS
6.4. SELECTION OF MOTIVATIONAL
TOOLS.
6.5. CHALLENGES IN SALES FORCE
MOTIVATION.
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SM / BU / M2 6 2 / 8

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.

SM / BU / M2 6 3 / 8

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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SM / BU / M2 6 4 / 8

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

SM / BU / M2 6 5 / 8

BEFORE SELECTING MOTIVATIONAL

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

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SM / BU / M2 6 6 / 8

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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SM / BU / M2 6 7 / 8

(C) NON FINANCIAL REWARDS:

PROMOTION (MAY INCLUDE FIN. REWARD)
RECOGNITION
CHALLENGING ASSIGNMENTS.

(D) ADDITIONAL MOTIVATIONAL TOOLS:

SALES TRAINING
SALES MEETINGS
EFFECTIVE SUPERVISION & LEADERSHIP
PERFORMANCE EVALUATION
CORPORATE / SALES CULTURE.
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SM / BU / M2 6 8 / 8

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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SM / BU / M2 7 1 / 12

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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SM / BU / M2 7 2 / 12

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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SM / BU / M2 7 3 / 12

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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SM / BU / M2 7 4 / 12

7.3 SALES LEADERSHIP SKILLS

COMMUNICATION & LISTENING.
PROBLEM SOLVING SKILLS.
INTERPERSONAL SKILLS (GOOD
WORKING RELATIONSHIP)
PERSUASIVE SKILLS (NOT
THREATENING / COERCING)
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SM / BU / M2 7 5 / 12

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.
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SM / BU / M2 7 6 / 12

(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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SM / BU / M2 7 7 / 12

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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SM / BU / M2 7 8 / 12

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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SM / BU / M2 7 9 / 12

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.
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SM / BU / M2 7 10 / 12

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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SM / BU / M2 7 11 / 12

(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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SM / BU / M2 7 12 / 12

(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.
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SM / BU / M2 8 1 / 22

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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SM / BU / M2 8 2 / 22

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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SM / BU / M2 8 3 / 22

(A) SALES VARIANCE ANALYSIS

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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SM / BU / M2 8 4 / 22

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

48,00, 000
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83

100

SM / BU / M2 8 5 / 22

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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SM / BU / M2 8 6 / 22

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

SM / BU / M2 8 7 / 22

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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SM / BU / M2 8 8 / 22

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 EXPANDED, REDUCED,
OR ELIMINATED.
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SM / BU / M2 8 9 / 22

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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SM / BU / M2 8 10 / 22

FOR EXAMPLE:
NATURAL
( T R A D IT IO N A L )
CO STS

F U N C T IO N A L C O S T S
TOTAL

S E L L IN G

ORDER
ADVERT- M ARKET PROCESS,
IS IN G
R E S E A R C H B IL L IN G ,
DESPATCH

1 0 ,0 0 ,0 0 0

5 , 0 0 ,0 0 0

1 , 0 0 ,0 0 0

1 , 0 0 ,0 0 0

3 , 0 0 ,0 0 0

RENT

3 , 0 0 ,0 0 0

1 , 5 0 ,0 0 0

2 5 ,0 0 0

3 5 ,0 0 0

9 0 ,0 0 0

S U P P L IE R S

2 , 0 0 ,0 0 0

3 0 ,0 0 0

5 0 ,0 0 0

2 0 ,0 0 0

1 , 0 0 ,0 0 0

1 5 ,0 0 ,0 0 0

6 , 8 0 ,0 0 0

1 , 7 5 ,0 0 0

1 , 5 5 ,0 0 0

4 , 9 0 ,0 0 0

S A L A R IE S

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SM / BU / M2 8 11 / 22

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

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SM / BU / M2 8 12 / 22

E.G. BASES OF ALLOCATION OF

FUNCTIONAL COSTS
F U N C T IO N A L
COSTS

SALES
T E R R IT O R E S

PRO DUCTS

S E L L IN G

D IR E C T

S E L L IN G T IM E
TO EACH
PRODUCT

A D V E R T IS IN G

D IR E C T / M E D IA
C IR C U L A T IO N

D IR E C T / M E D IA
SPACE FOR EACH
PRODUCT

M.R.

T IM E S P E N T

T IM E S P E N T

ORDER PROCES S IN G , B IL L IN G ,
DESPATCH

NO.OF ORDERS NO.OF ORDERS

& DESPATCH
& DESPATCH
U N I T S .www.a2zmba.comU N I T S .

MARKET
SEGM ENTS

T IM E S P E N T
NO.OF ORDERS
& DESPATCH
U N IT S .

SM / BU / M2 8 13 / 22

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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SM / BU / M2 8 14 / 22

FOR EXAMPLE, USING

(II) FOR PRODUCTS (A) & (B)
TOTAL

P R O D U C T S A P R O D U C T S B

S A L E S (R S .)

20 CRO R ES

8 CRORES

12 CR O R ES

V A R IA B L E
COSTS

12 CRO R ES

5 CRORES

7 CRORES

8 CRORES

3 CRORES

5 CRORES

4 CRORES

1 .5 C R O R E S

2 .5 C R O R E S

4 CRORES

1 .5 C R O R E S

2 .5 C R O R E S

D IR E C T F IX E D
COSTS
P R O F IT
C O N T R IN

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SM / BU / M2 8 15 / 22

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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SM / BU / M2 8 16 / 22

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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SM / BU / M2 8 17 / 22

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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SM / BU / M2 8 18 / 22

(B) IMPORTANCE OF P.E.

HELPS IN INCREMENTS &
PROMOTIONS.
HELPS IN SALES SUPERVISION.
HELPS IN MOTIVATION.

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SM / BU / M2 8 19 / 22

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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SM / BU / M2 8 20 / 22

(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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SM / BU / M2 8 21 / 22

(B) MEASURE ACTUAL

PERFORMANCE.
BASIC SOURCES:
(i) SALES
(ii) REPORTS.

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SM / BU / M2 8 22 / 22

(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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SM / BU / M3 1 1 / 9

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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SM / BU / M3 1 2 / 9

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 IS
DEVELOPED.
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SM / BU / M3 1 3 / 9

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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SM / BU / M3 1 4 / 9

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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SM / BU / M3 1 5 / 9

(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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SM / BU / M3 1 6 / 9

(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.
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SM / BU / M3 1 7 / 9

(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

SM / BU / M3 1 8 / 9

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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SM / BU / M3 1 9 / 9

(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.
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SM / BU / M3 2 1 / 6

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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SM / BU / M3 2 2 / 6

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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SM / BU / M3 2 3 / 6

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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SM / BU / M3 2 4 / 6

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,
www.a2zmba.com

SM / BU / M3 2 5 / 6

PRODUCT

FEATURE

ADVANTAGE

BENEFIT
/ VALUE

* CEILING
FAN

DOUBLE
BALL BEARING.

NOISE
FREE
RUNNING
FOR MANY
YEARS

SAVES
MONEY

* PHOTO
COPY
MACHINE

SERVICE
CENTRE

WITHIN
4-HOURS
SERVICE

SAVES
TIME

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SM / BU / M3 2 6 / 6

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. www.a2zmba.com